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Ministry of Education.
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Intellectual property in Technology teaching: Brief definitions: Trade Secrets

Trade secrets

Once an idea is developed into a commercial product, the developer could choose to continue to keep the way it is made a trade secret. Any employees who need to know the trade secret would have to sign a confidentiality agreement in their employment contracts.

The trade secret lasts forever, provided nobody reveals the information – the recipe for Coca Cola, for example, has remained a trade secret for over 100 years.

If a trade secret is revealed, the only remedy is to sue for damages – but the secret is out in the open! The developer cannot prevent somebody independently working out how to make the same product by 'reverse engineering' the process.

Unlike patents (see below), trade secrets only benefit the manufacturer of the product because they do not provide ideas for the public to use or develop.

Developed for the Technology Online site from a study by Susan Corbett, Louise Starkey and Ann Bondy, Victoria University of Wellington

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