Trade secrets
Trade secrets are a type of intellectual property that includes formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic value because they are not generally known or readily ascertainable by others, and which the owner takes reasonable measures to keep secret.
Trade secrets are an essential but invisible component of a company's intellectual property (IP). Their contribution to a company's value, measured as its market capitalization, can be significant. Being invisible, that contribution is hard to measure. Still, research shows that changes in trade secrets laws affect business spending on R&D and patents. This research provides indirect evidence of the value of trade secrecy [Lin, p. 32].
In contrast to registered intellectual property, trade secrets are, by definition, not disclosed to the world at large. Instead, owners of trade secrets seek to protect trade secret information from competitors by instituting special procedures for handling it and implementing technological and legal security measures. The most common reason for trade secret disputes is when former employees of trade secret-bearing companies leave to work for a competitor and are suspected of taking or using valuable confidential information belonging to their former employer [Bagley & Dauchy, p. 501].
Because the protection of trade secrets can, in principle, extend indefinitely, it may provide an advantage over patent protection and other registered intellectual property rights, which last only for a specific duration. For example, the Coca-Cola company has no patent for the formula of Coca-Cola and has been effective in protecting it for many more years than the 20 years of protection that a patent would have provided. Coca-Cola refused to reveal its trade secret under at least two judges' orders.
Lin, Thomas C.W. (2013). Executive Trade Secrets. 87 Notre Dame Law Review. С. 32-33. South Bend: Notre Dame Law Review.