These days, so much information is shared and available to the public. Ideas, secrets, private lives, beliefs, etc. are everywhere. However, many successful businesses recognize that not all information should be shared. In fact, if some of that information got out the value of that information—and maybe the value of the business itself—would diminish. That’s why companies have employees sign non-disclosure agreements with clear language, defined parameters, time frames, etc.
There is a difference, however, between what is called confidential information and what is deemed to be a trade secret.
First, let me be clear—a trade secret is, in fact, confidential information but not all confidential information is considered trade secrets. Confidential information can include a broad variety of different types of information. Some things are more of a personal nature, such as social security numbers or bank account information. Other types include information that provides a business with a competitive advantage, such as a business plan, formulas, strategies, profit and loss data, etc. All of this is considered to fall under the confidential information umbrella.
When defining what confidential information is in a non-disclosure agreement, the definitions can vary from being very broad to very narrow.
It all depends on the goals on the relationship between the parties. These agreements should be reviewed every few years to ensure the goals of the company are being met. A trade secret is a category of confidential information that is not generally known to the public or persons outside of the company who are knowledgeable about the general subject matter of the information. The company must make reasonable efforts protect it, keep it secret, and provide an economic advantage to the company. A perfect example of a “famously known” trade secret is the formula for Coca Cola. Another one is Google’s search algorithm. Although everyone knows it exists, no one knows what it actually is.
A successful business will normally have some type of confidential information that should be kept secret to retain value.
There may even be trade secrets involved. Make sure your valuable information is protected by calling an attorney at Goosmann Law Firm, PLC, in our Omaha, Sioux City, and Sioux Falls offices.