Trade secret in the context of "Non-disclosure agreement"

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⭐ Core Definition: Trade secret

A trade secret is information that a business keeps confidential to maintain a competitive advantage. Well-known examples include the Coca-Cola formula and the recipe for Kentucky Fried Chicken.

Unlike other forms of intellectual property ("IP"), trade secrets do not require formal registration and can remain protected indefinitely, provided the information continues to meet the legal requirements for trade secret status. Instead, non-disclosure agreements (NDAs), among other measures, are commonly used to keep the information secret.

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👉 Trade secret in the context of Non-disclosure agreement

A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA), is a legal contract or part of a contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to. Doctor–patient confidentiality (physician–patient privilege), attorney–client privilege, priest–penitent privilege and bank–client confidentiality agreements are examples of NDAs, which are often not enshrined in a written contract between the parties.

It is a contract through which the parties agree not to disclose any information covered by the agreement. An NDA creates a confidential relationship between the parties, typically to protect any type of confidential and proprietary information or trade secrets. As such, an NDA protects non-public business information. Like all contracts, they cannot be enforced if the contracted activities are illegal. NDAs are commonly signed when two companies, individuals, or other entities (such as partnerships, societies, etc.) are considering doing business and need to understand the processes used in each other's business for the purpose of evaluating the potential business relationship. NDAs can be "mutual", meaning both parties are restricted in their use of the materials provided, or they can restrict the use of materials by a single party. An employee can be required to sign an NDA or NDA-like agreement with an employer, protecting trade secrets. In fact, some employment agreements include a clause restricting employees' use and dissemination of company-owned confidential information. In legal disputes resolved by settlement, the parties often sign a confidentiality agreement relating to the terms of the settlement. Examples of such agreements are The Dolby Trademark Agreement with Dolby Laboratories, the Windows Insider Agreement, and the Halo CFP (Community Feedback Program) with Microsoft.

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Trade secret in the context of Intellectual property

Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, copyrights, trademarks, and trade secrets. The modern concept of intellectual property developed in England in the 17th and 18th centuries. The term "intellectual property" began to be used in the 19th century, though it was not until the late 20th century that intellectual property became commonplace in most of the world's legal systems.

Supporters of intellectual property laws often describe their main purpose as encouraging the creation of a wide variety of intellectual goods. To achieve this, the law gives people and businesses property rights to certain information and intellectual goods they create, usually for a limited period of time. Supporters argue that because IP laws allow people to protect their original ideas and prevent unauthorized copying, creators derive greater individual economic benefit from the information and intellectual goods they create, and thus have more economic incentives to create them in the first place. Advocates of IP believe that these economic incentives and legal protections stimulate innovation and contribute to technological progress of certain kinds.

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Trade secret in the context of Sensitive information

Information sensitivity is the control of access to information or knowledge that might result in loss of an advantage or level of security if disclosed to others. Loss, misuse, modification, or unauthorized access to sensitive information can adversely affect the privacy or welfare of an individual, trade secrets of a business or even the security and international relations of a nation depending on the level of sensitivity and nature of the information.

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Trade secret in the context of Industrial espionage

Industrial espionage, also known as economic espionage, corporate spying, or corporate espionage, refers to the systematic and unauthorized acquisition of sensitive business information. This practice typically targets trade secrets, proprietary operational data, and intellectual property belonging to competitors or other organizations. The information is gathered with the intent to gain competitive advantage, facilitate business decision-making, or for commercial sale to interested parties. Industrial espionage is conducted by various actors, including current or former employees, contractors, corporate competitors, foreign governments, and criminal organizations, and is universally recognized as both illegal and unethical.

While political espionage is conducted or orchestrated by governments and is international in scope, industrial or corporate espionage is more often national and occurs between companies or corporations.

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Trade secret in the context of Coca-Cola

Coca-Cola, or Coke, is a cola soft drink manufactured by the Coca-Cola Company. In 2013, Coke products were sold in over 200 countries and territories worldwide, with consumers drinking more than 1.8 billion company beverage servings each day. Coca-Cola ranked No. 94 in the 2024 Fortune 500 list of the largest United States corporations by revenue. Based on Interbrand's "best global brand" study of 2023, Coca-Cola was the world's sixth most valuable brand.

Originally marketed as a temperance drink and intended as a patent medicine, Coca-Cola was invented in the late 19th century by John Stith Pemberton in Atlanta. In 1888, Pemberton sold the ownership rights to Asa Griggs Candler, a businessman, whose marketing tactics led Coca-Cola to its dominance of the global soft-drink market throughout the 20th and 21st centuries. The name refers to two of its original ingredients: coca leaves and kola nuts (a source of caffeine). The formula of Coca-Cola remains a trade secret; however, a variety of reported recipes and experimental recreations have been published. The secrecy around the formula has been used by Coca-Cola as a marketing aid because only a handful of anonymous employees know the formula. The drink has inspired imitators and created a whole classification of soft drink: colas.

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Trade secret in the context of Open-source intelligence

Open source intelligence (OSINT) is the collection and analysis of data gathered from open sources (overt sources and publicly available information) to produce actionable intelligence. OSINT is primarily used in national security, law enforcement, and business intelligence functions and is of value to analysts who use non-sensitive intelligence in answering classified, unclassified, or proprietary intelligence requirements across the previous intelligence disciplines.

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