Confidential Information, Trade Secrets and Know-How

Date:  May 2020

Over the last month or so we have been asked by several of our clients what is the difference between Confidential Information, Trade Secrets and Know-how.

These terms are used often in the context of negotiations or in discussions in relation to collaborations, investment decisions, sale of a business, investment sales, collaboration of technology and in Non-Disclosure Agreements (NDA’s) to name a few.

Confidential Information, Trade Secrets and Know-how are very much part of the thought process in deciding whether to seek patent protection for your invention.

We thought it would be useful to explain the specific meaning of the terms.

Confidential Information

Confidential Information is information you wish to keep away from general public awareness. It is something that does not appear in the public domain and would involve procedures and documents around how it is shared with third parties.

Confidentiality Agreements would be used to manage Confidential Information and they will often be for a limited time frame especially in areas of technology development, where technology moves and changes rapidly.

Common forms of protection include:

  • Employment Agreements
  • NDA’s
  • Letters of Intent
  • Purchase or Sale Agreements
  • Agreements with third parties
  • Internal and external security measures
  • Good internal policies
  • Good understanding, education and awareness of Confidential Information by your staff

Trade Secrets

Trade Secrets are a type of Confidential Information. Trade Secrets are the specific information you want to keep to yourself and is usually what is fundamental to your product or service. It is what gives you your competitive edge, your commercial and economic advantage in the marketplace, i.e. the KFC recipe.  Trade Secrets could be a technique, method or manufacture, a formula, marketing information, designs, patterns, compilations of information.

Trade Secrets are crucial to identify as they have a value and provide a commercial advantage to your business. It is crucial to ensure that there is documentation in place controlling who knows the Trade Secret to maintain its secrecy.

Secrecy must be maintained. It is essential that processes need to be put in place to ensure that the Trade Secret is kept secret. It is not a registered Intellectual Property right.

Trade Secrets are Confidential Information but not all Confidential information is a Trade Secret.

A Trade Secret is an option to consider when deciding whether to seek patent protection.  

It is a case by case decision as to what is the most appropriate form of protection for you. The decision as to whether to pursue patent protection or keep as a Trade secret needs to be made early.

A patent needs to be filed before there has been any public disclosure. When the patent is accepted it is published for opposition purposes. This is the first time that the public can view the details of your invention. Once granted a patent has a term of 20 years.  

Provided your Trade Secret is properly managed it can stay secret for ever.  


Know-how is how you know to do something. It is the knowledge you personally acquire and develop. This knowledge travels with your employees and can be difficult to restrain the use of. Contractual restraints are usually employed to do this.

It is important as a business owner that you understand who holds the knowhow in your business.

So …. Now is the time to undertake an audit of your business to identify specifically who holds the knowhow in your business, what your company’s Confidential Information and Trade secrets actually are, what you are doing or need to do to keep them confidential or secret.