If the scope of patents is large, the range of trade secrets is enormous! In my mind, the world of trade secrets can be divided into two large buckets: “technical” and “business”.
Technical trade secrets are what most people think of – recipes, manufacturing methods, software code, and algorithms. It even includes a few surprises such as QC/QA protocols & standards, and even “negative know-how” (the knowledge of what doesn’t work). These are sometimes called “hard trade secrets”.
Business trade secrets are sometimes called “soft trade secrets”, especially by people who came from a technical background like most patent attorneys. In some cases, the business trade secrets are more often stolen (and then litigated) than the technical trade secrets. While some people say these are “boring” or “easy”, they’re anything but.
With a nod to David Letterman, here is Tangibly’s Top-10 Business Trade Secrets.
1. Financials
Financials including input costs, hedging strategies, logistics, pricing and margin data, COGS, and financial performance data (for non-public companies). Your competitors would love to know this vital information.
2. M&A strategies
M&A strategies. All companies have M&A strategies, either on the acquiring or being acquired side. This information is highly confidential, and any leaks could jeopardize the closing of valuable deals or risk insider trading scenarios.
3. Unpublished patent applications
Unpublished patent applications. Many people think that you can only pick one: patents OR trade secrets. The reality is that for the first 18 months after a patent application has been filed, the contents are on the “patent road” AND the “trade secret road” at the same time.
4. Invention disclosures
Invention disclosures. Invention disclosures are another form of “legal” trade secret. They’re never published and often contain information that does not get included in the subsequent patent application. There are also many invention disclosures that for various reasons are not made into a patent application at all and remain trade secrets.
5. Patentability and product clearance search reports
Patentability and product clearance search reports. Companies often engage search firms to evaluate things like patentability or product clearance / FTO. These evaluations can be quite pricey and often confidential and/or attorney-client privileged. The results can drive major decisions such as product design-arounds and licensing or litigation.
6. Competitive intelligence
Competitive intelligence. All companies spend considerable time and effort understanding what products and services are being developed by their competitors. If the competitor were to learn this information and the resulting strategies, it would be a huge loss. This type of business trade secret is often litigated when senior executives move from one competitor to another.
7. Vendor and supplier lists and relationships
Vendor and supplier lists and relationships. Supply chains are rich in trade secrets. Knowledge of what vendors and suppliers are used, as well as contractual terms such as pricing and inventory, are incredibly valuable secrets. In many cases, you can’t even disclose the names of vendors or suppliers.
8. Customer feedback
Customer feedback, both good and bad, is incredibly useful and valuable in evaluating new and existing products. Companies invest lots of time and money to test product and service concepts, as well as do “blind” comparisons against competing products. These insights are not available anywhere else.
9. HR policies and procedures
HR policies and procedures, including salary and total compensation package information, are not often thought of as trade secrets, but are vital in attracting and retaining talented staff. Many large companies have “salary bands” and other compensation details that are tightly controlled. Variable compensation packages for salespeople are also closely guarded.
10. Customer lists
Saving the best for last: customer lists. The most popular, and often most controversial business trade secrets are customer lists. Court cases vary in how they handle customer lists. The more non-public information that is included in the lists, the stronger the argument that they are trade secrets. This includes things like personal email addresses and mobile phone numbers, buying patterns, pricing information, and the like. A simple list of all companies in a particular sector will be more challenging to hold up as a trade secret.
There are many more trade secrets to explore
There are many more technical and non-technical trade secrets to explore. Tangibly brings together trade secret expertise and AI technology to identify valuable business and technical trade secrets and put the right protections in place. Meet with our team to protect what matters most.
