Trade Secrets: What Your Company Needs to Know
Author: Miod & Company
Date: July 23, 2021
Category: Family Law
Average Time Reading: 3 minutes
What Businesses Need to Know About Trade Secrets
At the center of the world’s second-largest beverage enterprise is a single recipe rumored to be known by only two people. This recipe belongs to Coca-Cola, and its publication could topple the company overnight. That’s because it is a trade secret.
What Is a Trade Secret?
Trade secrets offer several benefits over more traditional protections offered for intellectual property. Patents, for example, last only 20 years. After that period, all the information contained therein enters the public domain. A successfully kept trade secret will belong to a company indefinitely. Also, the process for obtaining a patent or trademark requires that the information to be protected be divulged in an application. This poses a risk that many businesses deem unacceptable.
What Are the Advantages of Trade Secrets?
Trade secrets offer several benefits over more traditional protections offered for intellectual property. Patents, for example, only last 20 years. After that period, all the information contained therein enters the public domain. A successfully kept trade secret can remain the sole property of the company keeping it indefinitely. As well, the process for obtaining a patent or trademark requires that the information to be protected be divulged in an application. This poses a risk that many businesses deem unacceptable.
How Are Trade Secrets Protected?
The primary way to protect a trade secret is to limit access to it. Businesses have many ways of ensuring that sensitive material is kept safe and secure. Individuals will often have to sign confidentiality agreements upon entering and vacating an employment position. These contracts simply provide legal insurance against the misuse or dissemination of trade secrets by employees. Trade secrets and their related materials are also kept under close supervision. They may be kept in a secure location like a vault, accessible only to specific persons with special credentials, and encrypted in various ways.
Why It Matters
In a world where companies are becoming more and more reliant on complex marketing and data algorithms to do business, the importance of secrecy is growing. Enterprises built around unique software can collapse instantly if their source code is made public. Thus, many commercial enterprises find themselves more vulnerable to things like cyber attack and must take greater measures to protect their IP. Regardless of what kind of business a company does, though, its trade secrets are crucial to its success, and their protection should be a top priority. Need help understanding these trade secrets in the context of your own business? We can help! Get in contact with us at Miod & Company today!
Author: Miod & CompanyDate: June 15, 2022Category: TaxAverage Time Reading: 4 minutesIt’s not a common occurrence for a business to bring on a member of a rival firm to its staff. It’s even less likely to bring on a founder of a rival firm. Paul White joining Miod...
Author: Miod & Company Date: October 22, 2022 Category: Business Valuation, Tax Average Time Reading: 8 minutes An audit of financial statements is beneficial for the long-term health of your business in many ways. An audit can identify potential issues, provide...
Let us take care of the accounting
Fill out our contact form and we will connect you with an expert that can help
Schedule a Free Consultation
Join Our Newsletter
Subscribe to get the latest updates.
Phone: (818) 898 9911