Application of Business Trade Secrets

A trade secret is an intellectual property (IP) right that protects confidential information, as per the World Intellectual Property Organization (WIPO). Trade secrets protection helps you maintain fair competition with other businesses in the market. It prevents the information from being disclosed, misused, or used by others.

Maintaining business trade secrets is crucial to ensure a level playing field in a competitive market. However, you cannot prevent others from using the same idea or information if they have obtained the rights through a legal transaction, such as the patenting process.

Once you obtain legal rights over a particular business secret or information, no one will be authorised to use that information.

For instance,  the most famous secret formula of Coca-Cola and KFC has been kept confidential for many years. This is because the companies obtained the formulas through legal transactions and have subsequently maintained proper measures to prevent them.

How Companies Use Confidential Information to Gain a Competitive Edge?

Businesses in the UAE can protect any piece of information as their trade secret. It can be a food-preparing formula, a unique marketing strategy, or any other commercially valuable idea. Some of the examples are  mentioned below:

• Secret Formulas

Food companies have their own secret formulas that make their food taste unique and more appealing to customers. In the UAE,  these formulas are protected under business trade secret protection.  

• Patented Technology

Companies can patent their new invention and technology to protect it from any unauthorised usage. This allows businesses to maintain a monopoly on their technology, enabling them to charge higher prices or sell more products.

• Customer Data

Companies collect information about their customers, such as their shopping preferences and sometimes personal details, mainly through a survey. This data is stored in their database and can be used to create targeted marketing campaigns and personalise the customer experience. If these companies use any personal information of any of their customers, it will fall under the violation of trade secret law.

• Manufacturing Process

A company can patent the idea that they used to manufacture their product in better quality than other companies.

• Marketing Strategy

A company might have a secret marketing strategy that helps them reach their target audience more effectively.

Measures to Protect your Trade secrets

To protect trade secrets, you need to take specific measures. Here’s a breakdown:

• Companies can specify their documents and other materials by marking them as “restricted”. 
• Granting limited access to others to use your trade secrets by carefully managing the agreement.
• Businesses can implement several technical measures, such as encryption and firewalls, to protect access to restricted information.
• In some cases, companies can ask their employees to sign non-disclosure agreements prohibiting them from sharing the company’s confidential information.
• Some of the companies strategically license their trade secrets to monetise their proprietary knowledge by granting limited access to others.

Benefits of Strong Trade Secret Protection

Here are some of the reasons why it is important to protect your trade secrets:

• Protecting trade secrets can provide a unique edge over competitors.
• This can help increase profits by manufacturing price-worthy products.
• They can safeguard information that isn't suitable for patents or copyrights.

By keeping this information secret, companies can protect their competitive advantage and stay ahead of their competitors. To learn more, contact our business setup consultants. They will also walk you through the legal process and formalities required for protecting your trade secret.