Trade secrets are a company’s most valuable assets, and their unlawful access can cause irreparable commercial harm. Yet, unlike patents or trademarks, trade secrets rely entirely on internal measures for their protection. Today the global shift to remote and hybrid work models are no longer a temporary response to crisis — it is the new normal which is demanding an urgent need to evolve global intellectual property (IP) laws and corporate policies for how confidential trade information is accessed, shared, and protected.
READ MORE: The IP Mistakes Startups Make and – How to stay safe
Hence, for legal professionals and HR teams, this means an urgent need for comprehensive trade secret protection strategies that are robust and flexible to secure critical information in a borderless, digital-first world.
What are Trade Secrets:
Trade secrets are a wide range of critical know-hows for instance, proprietary formulas (e.g., a chemical composition), business strategies, customer databases, software source codes, or manufacturing techniques etc — critical for any organisation to sustain its market competitiveness , amounting to the right of its protections. According to the EU Trade Secrets Directive (Directive (EU) 2016/943), a trade secret is therefore defined as information that:
- Is an organisationsl secret, meaning it is not generally known or readily accessible,
- Has commercial value, and
- Has been subject to reasonable steps by the rightful holder to keep it secret.
Similarly, in India, while there is no specific statute, trade secret protection is recognized through:
- Contract law (especially confidentiality agreements),
- Equitable principles (through breach of confidence actions),
- Judicial precedents, such as John Richard Brady v. Chemical Process Equipments P. Ltd. (1987), where courts granted relief based on common law principles.
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Legal Strategies for Protecting Trade Secrets:
At Nicomedia we advocate our clients to firstly, take reasonable steps to secure the identity of their organisation and maintain internal policies for its secrecy, such as :
- Confidentiality Agreements (NDAs)
When a company hires this clause it should be made mandatory for all its employees, consultants, vendors, or partners. Clear definitions of ‘Confidential Information’ and obligations around use, access, and disclosure must be included . This sets clear expectations on demands around company’s terms of recruitment policies , service desired , inventory management and labor compliances.
Employment Contracts
Trade secrets in temporary contracts are advised to embed certain elements that secure the organisations secrecy to maintain an edge over their market presence . Such as,
- Confidentiality clauses which can set clear terms both during and after employment,
- Non-solicitation clauses which can protect your clients and avoid scope creeping between your customers and employee relationships, and
- Non-compete clauses, this helps organisation in securing their trade secrets from misuse post-employment . However, the clause is subject to abuse by many organisations that can impact an employee due the nature of poor drafting , creating overbroad of restrictions . Thereby invalidating the enforceability of entire clause or ability of either to make damages claims.
Internal Trade Secret Policies
Internal trade secrets policies must clearly identify protected trade information, procedures that are absolutely vital for an organisation and then only obtain written acknowledgments from their employees.
At Nicomedia our experts often come across non-enforceable and generic corporate policies without enacted without due diligence. This is not a best practice for any serious organisations seeking to hire remote specialists and practitioners for their company .
Work From Home but Protect From Harm:
Today, trade secrets are as vulnerable as they are valuable. In the remote-first world, protection demands not only strong legal agreements but also an ecosystem of technological, procedural, and cultural safeguards.
Companies working in scientific and manufacturing industries are particularly advised to taking documented reasonable measures from legally equipped professionals , which is the key to enforceability and protection from damages . Besides, HR and legal teams must collaborate closely to create a trade secret protection strategy that adapts to modern realities — because once a secret is out, no legal action can truly put it back.
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