Trade secrets
Intellectual Property Rights

A trade secret is confidential information of a special type. A court will prevent an employee, ex-employee or contractor from using trade secrets for their own purposes without the necessity of an explicit cotnractual provision. Be that as it may, confidentiality provisions should be a fundamental part of a contract of engagement, however they do not always appear in such contracts.

In determining whether information is a trade secret, a court will have regard to:

1. the nature of the engagement and whether sensitive information was received regularly;
2. the nature and sensitivity of the information which is the subject of the complaint;
3. the degree to which the employer impressed the importance of maintaining secrecy;
4. how readily the alleged trade secret is discrete from other, separate non-confidential information; and
5. the extent to which the information is already in the public domain; and
6. the damage that would be caused to the claimant by disclosure.

Information that is regularly considered trade secrets includes software, technical processes or know-how, and sensitive pricing information. The distinction to be drawn is that the information considered to be a trade secret is not part of the employee's or contractor's general skills and knowledge.

Employment Contracts

During the course of employment, there is an positive obligation on employees to keep their employers' technical secrets confidential, along with obtaining information from their employer during their engagement with an intention to take the information on departure whether in a material form or by memory.

After employment has ended, the obligations upon an ex-employee to maintain the secrecy of an employers' confidential information is dramatically reduced on the basis that the employee must be permitted to utilise their skills, knowledge and experience acquired during the course of their employment. The line drawn by the legal system is that the ex-employee will be prevented from exploiting the goodwill of their former employer and their trade secrets. For instance, an ex-employee is not entitled to take or memorise a list of customers for their own use at the end of thee employment contract, however approaching known customers drawn from their memory is permitted, provided there is not a restrictive covenant in place prohibiting them from doing so.