A trade secret refers to confidential business information that provides a company with a competitive edge. This includes formulas, practices, processes, designs, instruments, or compilations of information that are not generally known or easily ascertainable by others.

In Australia, trade secrets are protected through the common law action of breach of confidence. To establish a breach, one must demonstrate that:

• The information has the necessary quality of confidence.
• It was imparted in circumstances importing an obligation of confidence.
• There was unauthorized use or disclosure of the information.

Businesses can protect their trade secrets by:

• Implementing robust confidentiality agreements with employees and contractors.
• Restricting access to sensitive information on a need-to-know basis.
• Utilizing non-disclosure agreements (NDAs) when sharing information with third parties.
• Regularly training staff on the importance of maintaining confidentiality.

A breach of confidence occurs when confidential information is disclosed or used without authorization. To prove a breach, the following elements must be established:

• The information is confidential.
• It was communicated in circumstances implying an obligation of confidence.
• There was unauthorized use or disclosure, causing detriment to the owner.

Yes, trade secrets can be protected indefinitely, provided they remain confidential. Unlike patents, which have a fixed term, the protection of trade secrets lasts as long as the information is kept secret and continues to provide a competitive advantage.

In cases of misappropriation, the following remedies may be pursued:

• Injunctions: Court orders to prevent further unauthorized use or disclosure.
• Damages: Compensation for losses suffered due to the breach.
• Account of profits: Requiring the wrongdoer to surrender any profits made from the misuse.

Key differences include:

• Protection Mechanism: Trade secrets rely on confidentiality, while patents require public disclosure in exchange for exclusive rights.
• Duration: Trade secret protection can last indefinitely; patents have a limited term (usually 20 years).
• Registration: Trade secrets do not require registration; patents must be registered with IP Australia.

Employees are generally prohibited from using or disclosing their former employer's trade secrets or confidential information. However, they may utilize skills and general knowledge acquired during their employment, provided they do not breach confidentiality obligations.

A Non-Disclosure Agreement (NDA) is a legally binding contract that establishes a confidential relationship between parties. It outlines the information to be shared and restricts its disclosure to third parties, thereby protecting trade secrets and other sensitive data.

To enforce rights over trade secrets, businesses should:

• Ensure all confidentiality agreements are well-drafted and enforceable.
• Maintain clear policies and procedures for handling confidential information.
• Act promptly if a breach is suspected, seeking legal advice to determine appropriate action.