Trade Secrets Act: Efficient Implementation Requires IT Support

The Trade Secrets Act is a critical piece of legislation designed to protect confidential business information. This law provides businesses with the legal framework to safeguard their proprietary information, ensuring that sensitive data such as formulas, processes, designs, and customer lists remain secure from unauthorized disclosure and misappropriation. By enforcing strict penalties for violations, the Trade Secrets Act helps maintain fair competition and encourages innovation within various industries.

How to Protect Trade Secrets

The protection of intellectual property in the manufacturing industry is becoming more and more important because of global economic ties.

  • The law for the protection of trade secrets is intended to protect knowledge and information in the company.
  • Companies are now also entitled to the destruction, disclosure, and recall of trade secrets and removal and withdrawal from the market.
  • There are three basic measures that companies can take to protect themselves from the disclosure of secrets.

In cyberattacks by social engineering, employees are manipulated to induce them to divulge information or infiltrate spy software unwittingly.

The law for the protection of trade secrets , which came into force in 2019, is intended to protect know-how and information in the company from “unlawful acquisition as well as unlawful use and disclosure”. On the one hand, this requires improved protection for companies and, on the other hand, the need to take advantage of this Protectionism.

Protection of intellectual property and trade secrets

Trade secrets are now intended to offer companies better protection against and against disclosure of secrets. In addition to the already existing right to removal, omission, compensation and information, you now also have the right to destruction, surrender, recall or removal and withdrawal from the market. In return, companies must take effective measures and document them thoroughly. Without IT support, these measures can hardly be implemented efficiently.

Trade Secrets – Everything you need to know

According to this, everyone should only have access to the information they need for their work. However, the manual implementation of this regulation is often very complex and associated with risks. Employees change roles or departments, leave the company or are represented on vacation.

Also Read: MFRMLS Login Portal – MFR Matrix Online

The use of professional access rights management systems (ARM) is recommended so that this change can be mapped seamlessly in the rights distribution at any time. This allows the current access status in the company to be kept up-to-date in a simple and largely automated manner at any time. The aim is to ensure that all required persons have short-term access to data relevant to them while at the same time protecting all data from unauthorized access.

The Economic Effects of Trade Protectionism

Information Behavior Of Employees: The greatest threat to corporate secrets is employees. cybersecurity study found that internal user errors accounted for by far the largest percentage of cybersecurity-related incidents at 80 per cent over the past twelve months. Companies, therefore, need to become more vigilant about employee activities.

In addition to implementing basic access controls and network management solutions, automated monitoring of user activity with the help of a “Security Information and Event Management” solution, or SIEM for short, can quickly alert security officers to suspicious activities and enable them to react quickly to security threats.

Free Trade vs Protectionism: Understanding the Concepts

The Trade Secrets Act also attaches great importance to the legal claims that companies can make due to the betrayal of secrets discovered – even across national borders.

  • However, to assert these claims, they must be documented in compliance with the requirements.
  • Due to the constant change in companies, it is almost impossible to keep this documentation up to date by hand at all times.
  • Automated IT solutions are also recommended here, which automatically record all changes and make them available in an audit-proof manner.
  • Such solutions often exist in combination with the access management solutions mentioned above.
  • Compliance requirements for handling confidential data can thus be adhered to more easily.
  • In this country, the manufacturing industry lives from its ideas – if these are stolen, industry loses its world-famous lead.
  • It is, therefore, to be welcomed that these ideas are now better protected by the legislature.

However, implementing this law can be time-consuming in practice – every IT professional knows how complex access rights management is. Therefore, the machine-builders should get support from automated IT solutions. This not only helps secure your infrastructure but can also help small and medium-sized companies in particular to advance digitization.

FAQs on Trade Secrets

What is considered a trade secret under the Trade Secrets Act?

A trade secret is any information that is not generally known or readily accessible to the public and derives economic value from its secrecy. This can include formulas, practices, processes, designs, instruments, patterns, or compilations of information.

How does the Trade Secrets Act protect businesses?

The Act allows businesses to take legal action against individuals or entities that improperly acquire, disclose, or use their trade secrets. It provides remedies such as injunctions, damages, and, in some cases, punitive damages and attorney fees.

What steps should businesses take to protect their trade secrets?

Businesses should implement comprehensive security measures, including non-disclosure agreements (NDAs), employee training, access controls, and regular audits. Ensuring that only authorized personnel have access to sensitive information is crucial.

Also Read: Exercises To Improve Social Skills

What are the penalties for violating the Trade Secrets Act?

Penalties for violating the Act can be severe, including substantial monetary damages, injunctions to prevent further use or disclosure of the trade secrets, and in some cases, criminal charges. The exact penalties depend on the nature and extent of the violation.

How can an individual or company defend against allegations of trade secret misappropriation?

Defenses against allegations may include proving that the information was obtained independently, was already public knowledge, or was disclosed with the owner’s consent. Additionally, demonstrating the lack of reasonable measures taken by the owner to protect the trade secret can be a valid defense.


The Trade Secrets Act is an essential tool for businesses aiming to protect their competitive edge and intellectual property. By understanding and utilizing this law, companies can ensure that their valuable information remains secure and their innovation efforts are not compromised. Proper implementation of security measures and legal safeguards is crucial in maintaining the integrity and confidentiality of trade secrets in today’s competitive business environment.

Leave a Reply

Your email address will not be published. Required fields are marked *