A trade secret is defined as any confidential information used in the operation of a business and that is sufficiently valuable to afford an actual or potential economic advantage. This includes a formula, pattern, compilation, program device, method, technique, or process.
Examples of trade secrets are formulas for products, such as the formula for Coca-Cola, information providing a business with competitive advantage, and advertising and distribution strategies.
To qualify as a trade secret, the information must fulfill the following requirements:
• Being usually unknown in its final form.
• Its components are precise, or usually difficult to acquire among people usually dealing with this kind of information.
• Having commercial value due to its secrecy.
Trade secrets are generally unknown to persons who normally practice in the field in question, and have commercial value because they are secret. The persons who are lawfully in control of the information may take reasonable steps to keep it secret. Trade secrets are protected for a theoretically unlimited period of time, and without any procedural formalities. However, trade secrets tend to be leaked, and protection is not free, so as a result companies must go to extreme measures to protect their commercial secrets.