Te Kete Ipurangi Navigation:

Te Kete Ipurangi

Te Kete Ipurangi user options:

Ministry of Education.
Kaua e rangiruatia te hāpai o te hoe; e kore tō tātou waka e ū ki uta

Intellectual property key terms: 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.

Length of a trade secret

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

What happens if a trade secret is revealed

If a trade secret is revealed, the only remedy is to sue for damages. Howver, the secret is already out in the open, so the cost of litigation may be prohibitive.

In addition, the developer cannot legally prevent somebody independently working out how to make the same product by reverse engineering the process.

Trade secret versus patent

While a patent protects a tangible thing (the unique invention), a trade secret is intangible (the idea behind the development). Because the trade secret does not provide ideas for the public to use or develop, its sole benefit is to the manufacturer of the product.


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

Return to top ^