What practical steps help protect trade secrets?

Trade secret protection typically includes identifying what qualifies as a trade secret, using NDAs, limiting access, applying technical safeguards such as encryption, training staff, and documenting measures to show that reasonable steps were taken.

Trade secrets

Q: What is a trade secret?

A trade secret is confidential business information that has commercial value because it is not generally known and is protected by reasonable steps to keep it secret, such as access restrictions and confidentiality agreements.

Q: How are trade secrets protected under Swedish law and EU rules?

Trade secrets are protected under the Swedish Protection of Trade Secrets Act (2018:558), which implements the EU Trade Secrets Directive 2016/943, providing remedies when trade secrets are unlawfully acquired, used or disclosed.

We advise on trade secrets, protective measures, agreements and internal handling

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Glossary
Trade secrets

Explained — what is a trade secret?

A trade secret is information that a business keeps confidential to protect its competitive edge. A commercial lawyer frequently handles matters concerning trade secrets and ensures appropriate safeguards are in place. The concept is governed by the Swedish Protection of Trade Secrets Act (2018:558), which implements the EU Trade Secrets Directive 2016/943. Examples include customer lists, technical solutions and strategic business plans. In short, the definition of trade secret focuses on secrecy, commercial value and reasonable steps taken to keep the information confidential.

When does a trade secret issue arise?

Issues typically arise when information risks being disclosed or exploited in a way that harms the company. Common scenarios include employees moving to a competitor or an unauthorised party gaining access to sensitive material. During business transfers, corporate transactions and collaborations, trade secrets must also be handled correctly to avoid disputes. These contexts often raise questions such as what is a trade secret in this setting and whether the definition of trade secret is met.

Trade secrets protection concept with computer lock icon, secure files and user access controls, illustrating confidentiality, IP security and data protection compliance.

Points to consider for trade secret protection

To ensure robust protection, several practical and legal measures should be put in place.

Identify which information qualifies as a trade secret with reference to the definition of trade secret.
Implement a framework of confidentiality agreements/NDAs with employees and partners.
Restrict access to sensitive information and deploy technical protection measures.
Train staff on what is a trade secret and on handling protocols.
Review exit procedures to protect information when employment ends.
Document safeguards so you can demonstrate that reasonable steps were taken.

By working systematically, an organisation can reduce the risk of misappropriation and litigation. This includes strengthening IT governance, applying access controls and using encryption as part of information security — i.e. encryption in information security as one of several technical protection measures.

Trade secrets

Why are trade secrets important?

Trade secrets are critical because they often embody unique, non-public assets that underpin a firm’s market position. Loss of a trade secret can cause financial damage and erosion of market share. The legislation provides legal mechanisms to protect such information and to deter misuse across Europe under the EU framework.

Effective protection also builds confidence in collaborations and investment processes. Businesses can share limited sensitive information with partners when clear legal parameters apply, which supports innovation and development.

From a business perspective, sound management of trade secrets strengthens trust between companies, customers and investors. It signals that the organisation takes information security seriously and is committed to long-term relationships.

A trade secret is information that is secret, has commercial value because it is secret, and is subject to reasonable steps to keep it confidential — the core definition of trade secret.

The rules apply when someone unlawfully acquires, uses or discloses a trade secret. This can involve current or former employees as well as external actors.

Key methods include:

Introducing confidentiality agreements at hiring and for collaborations
Restricting access to sensitive material
Using IT security controls and encryption
Training staff in information security and what is a trade secret

They are often unique resources that cannot easily be replicated. If disclosed, competitors can exploit the information and the company may lose its market position.

Ultimately the management is accountable, but all employees must respect and protect confidential information. Legal specialists and compliance officers are also key.

Registered IP rights such as trade marks and patents are protected through specific regimes, while trade secrets are protected only as long as confidentiality is maintained. The difference between trade secrets and patents therefore lies in disclosure, registration and enforcement strategies; both are valuable but require distinct approaches.