News & Publications

By: Victory Sarah Opawoye

Introduction:
According to Jake Frankenfield, trade secrets are defined as “any practice or process of a company that is generally not known outside the company.” These trade secrets can be the most valuable assets of a company, unlike patents which can be documented. The significance of trade secrets lies in their secrecy, making it challenging to regulate. Trade secrets protect undisclosed information as long as it holds economic value.
Importance of Protecting Trade Secrets:
The World Intellectual Property Organization (WIPO) highlights several reasons for protecting trade secrets. Firstly, it helps maintain and promote standards of commercial ethics and fair dealing. Secondly, trade secret protection provides an incentive for businesses to innovate by safeguarding the significant time and capital invested in developing advantageous innovations, especially those that are not patentable or do not merit the cost of patenting. Lastly, it prevents competitors from using these innovations without shouldering the costs and risks associated with their development.
Qualifications for Trade Secret Protection:
For a business to qualify for trade secret protection, certain criteria must be met. Firstly, the information must be a secret and have potential commercial value. Secondly, the holder of the trade secret must have taken reasonable steps to ensure its confidentiality. According to Article 39 of the Trade-Related Aspects of Intellectual Property Rights (TRIPS), trade secrets are classified as undisclosed information that needs protection as long as the following conditions are met: (i) the information is not generally known or easily accessible to those dealing with similar information, (ii) it holds commercial value due to its secrecy, and (iii) reasonable steps have been taken by the lawful owner to maintain its confidentiality.

Types of Trade Secrets:
Trade secrets encompass a wide range of information, including software algorithms, invention designs, ingredients, devices, methods, formulas, processes, and any other confidential business information that provides a competitive advantage. Unlike other forms of intellectual property, trade secrets do not require procedural formalities for protection and can be safeguarded for an extended period.

Examples of Trade Secrets:
Notable examples of trade secrets include the Google Search Algorithm, which undergoes regular updates to ensure system security, Coca-Cola’s Formula, and McDonald’s Big Special Sauce. These trade secrets represent critical assets for the success of these companies.
Trade secrets play a crucial role in businesses by safeguarding valuable and undisclosed information. By protecting trade secrets, companies can maintain their competitive advantage and prevent unauthorized use of their innovations. Understanding the importance of trade secret protection is essential for businesses operating in Nigeria’s intellectual property landscape