Definition
A trade secret is valuable, confidential information, such as a formula or process, that a company protects by keeping it secret rather than disclosing it in a patent.
Why It Matters Legally
Choosing between a patent and a trade secret is a major strategic decision. Patents require disclosure but provide a time-limited monopoly, while trade secrets last indefinitely but offer no protection once revealed.
Example Use Case
A beverage company keeps its formula as a trade secret rather than patenting it, avoiding public disclosure and preserving protection indefinitely.
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Related Terms
Patent, Intellectual Property, Patent Application, Licensing