Trade secrets can cover a wide variety of know-how and business information that is undisclosed and intended to remain confidential. Well managed trade secrets can preserve a company's unique market position and therefore be an important business tool.
Trade secrets can be various kinds of information that is valuable to a company and should be kept secret. The information could pertain to strategies, expertise or processes, or e.g. algorithms for software solutions. Trade secrets can also extend to manufacturing processes or technology that can be kept secret.
A piece of information can classify as a trade secret if it meets all of the following requirements:
Law 131/2020 on trade secrets entered into force on the 17th of December 2020. The law brings the Icelandic legal environment with regards to trade secrets into line with the rest of the EEA.
To prevent your competitors from attaining your important and valuable information it is important to define and keep track of what information could qualify as trade secrets and take the necessary steps to keep them secure.
This can also help a company define what they can talk about when they are talking to outside parties or what information they can disclose publicly.
It is important to limit access to this information so that it is only accessible by those that need to. If it is important for a person to access your trade secret you might want to consider the use of a non-disclosure agreement (NDA). It might also be useful to consider a secrecy clause in employment contracts for employees that work with trade secrets.
A non-disclosure agreement (NDA), otherwise called confidentiality agreements, are private contracts whereby valuable information is kept safe. It states that should the person break the legal agreement on confidentiality they can be held legally accountable. An NDA can, therefore, be a useful tool to keep a trade secret secure.
It might also be useful to consider a secrecy clause in employment contracts for employees that work with trade secrets.
An NDA can protect information on all development stages of innovation, even after it has reached the market. It is always recommended that you seek the services of an IP lawyer to assist you in drafting an NDA and secrecy clauses in employment contracts.
It is often problematic for companies to get other parties to sign NDAs. Many larger companies will not consider signing an NDA unless they have considerable interest in the idea. It is therefore important to define what information is an integral and valuable part of the idea and could actually qualify as a trade secret. Only then should they attempt to limit access to that specific information and make sure that it is kept safe. This can also help a company define what they can talk about when they are talking to potential partners, investors or other outside parties.