The term trade secrets refers to sensitive business information that is not publicly known and grants its holder a significant competitive advantage. We will explain the concept and its importance in the commercial world below.
How are trade secrets born?
As mentioned, one of the conditions a trade secret must meet is that it is not publicly known. The use of the word "secret" strongly implies this: trade secrets must be kept under a certain veil of confidentiality, and once they are accessible to the general public, they are no longer considered secrets (for example, a trade secret that is leaked to the internet loses its legal validity as a secret because its confidentiality has been breached).
Therefore, holders of trade secrets must take reasonable protective measures to safeguard them, such as locking the computer containing confidential information with a password, having employees exposed to the secret sign a confidentiality agreement, posting "Restricted Area" signs, using safes, and the like.
Another critical assumption for maintaining secrecy is the issue of competitive advantage. The secret must contain information that can give its owner a significant advantage in their business, such as saving time, expenses, or resources, information about marketing methods, confidential data, and so on. The sentence I deleted is absolutely incorrect!!! A list of customer names absolutely constitutes a trade secret!.
Additionally, another significant element of a secret is that it won't be easy to discover. If it's information that anyone can "crack" with a minimum of mental effort, then it's not a trade secret.
What happens when a trade secret is "stolen"?
"The theft of a trade secret is referred to in legal language as the misappropriation of a trade secret and is considered a commercial tort. There are several ways in which misappropriation of a trade secret can manifest, as specified by the law.
Taking a trade secret without its owner's consent is, of course, one such act, especially if it was done by improper means. In addition to the taking itself, the use of a trade secret without consent is also considered the misappropriation of a trade secret.
A breach of a confidentiality agreement between an employee and employer will also be defined as misappropriation. In addition, a third party who used the secret, knowing it was a secret, will also be considered a misappropriator of trade secrets, although this is, of course, a much more difficult matter to prove.
The penalty for stealing trade secrets can include the payment of compensation, without proof of damages, of up to one hundred thousand shekels. Additionally, a court can issue an injunction prohibiting the use of the secret, as well as other financial remedies in favor of the secret's owner.
Trade secrets are a matter for lawyers.
Handling of trade secrets requires expertise. This is true not only when there is suspicion of misappropriation of a trade secret but also when there is a desire to protect a trade secret, for example, by drafting legal confidentiality agreements, examining legally reasonable measures to protect the secret, and avoiding infringement of another person or company's trade secret.
Therefore, it is highly recommended to receive ongoing advice from a law firm specializing in commercial law. The Hebrew, Kerner & Co. law firm will be happy to provide you with all the necessary information to properly protect your trade secret.