Trade secrets and confidentiality
Short answer
A trade secret consists of facts of a commercial, production or technical nature relating to a business that have value, are not commonly available in the relevant business circles, are meant to be kept secret and whose secrecy the owner also protects in an appropriate manner. The missing last feature is the most common reason protection fails: whoever does not protect the information has no trade secret. Reverse engineering of a publicly available product is not a breach.
6 statutory citations below · law as at
A trade secret does not arise by labelling something secret. The Act requires five features at once, and one of them is active: the owner has to protect the secrecy.
That is why protection is in practice decided not in court but earlier: by whether the company can show that it restricted access, marked documents and required confidentiality from the people who got to them.
Five features that have to apply at the same time
They are facts of a commercial, production or technical nature relating to a business. A price list, a list of suppliers, a recipe or source code qualify; a personal note with no link to the business does not.
They have actual or at least potential value, material or immaterial.
They are not commonly available in the relevant business circles. What a competitor can find out from public sources is not a secret.
They are meant to be kept secret according to the owner's will.
The owner protects their secrecy in an appropriate manner. This is the feature that most often goes unmet, and without it there is no protection.
What counts as a breach
Unlawful acquisition, use or disclosure. Acquisition is unlawful in particular where it involves access to documents or files contrary to the principle of fair business dealing, including copying them.
Use or disclosure by someone who breaches a confidentiality agreement or another duty of confidentiality is a breach as well.
Liability extends to anyone who received the secret onward and knew or should have known that it came from someone who had disclosed it unlawfully.
When acquisition is lawful
By independent discovery or creation.
By observing, studying, disassembling or testing a product that has been made available to the public or that the acquirer lawfully owns. Reverse engineering is therefore not in itself a breach.
By exercising the right of employees to information and in other ways consistent with the principle of fair business dealing.
The Act specifically protects the exposure of unlawful conduct: disclosure to protect the public interest is not unlawful.
What a confidentiality agreement is for
The Commercial Code protects confidential information provided during negotiations about a contract even without a separate agreement: the receiving party may neither disclose it nor use it contrary to its purpose, regardless of whether a contract is concluded.
Beyond that, a confidentiality agreement is useful in three ways: it defines what exactly is confidential, it proves that the fifth feature of a trade secret is met, and a contractual penalty can be agreed in it, so the amount of the damage need not be proven.
What the statute says word for word
The wording comes from the same verified corpus of statutes the Paragrafo advisor runs on. Every link opens Slov-Lex, the official register, so you can compare it yourself.
Obchodné tajomstvo tvoria všetky skutočnosti obchodnej, výrobnej alebo technickej povahy súvisiace s podnikom, ktoré majú skutočnú alebo aspoň potenciálnu materiálnu alebo nemateriálnu hodnotu, nie sú v príslušných obchodných kruhoch bežne dostupné, majú byť podľa vôle majiteľa obchodného tajomstva utajené a majiteľ obchodného tajomstva zodpovedajúcim spôsobom ich utajenie zabezpečuje.Porušením obchodného tajomstva je konanie rušiteľa obchodného tajomstva spočívajúce v neoprávnenom získaní, využití alebo sprístupnení obchodného tajomstva.pozorovaním, skúmaním, demontážou alebo testovaním výrobku alebo predmetu, ktorý bol sprístupnený verejnosti alebo ktorý oprávnene vlastní osoba, ktorá informácie získalaZískanie, využitie alebo sprístupnenie obchodného tajomstva nie je neoprávnené, ak k nemu došlo za účelom ochrany verejného záujmu, najmä v súvislosti s odhalením protiprávneho konania alebo inej protiprávnej činnosti.Ak si strany pri rokovaní o uzavretí zmluvy navzájom poskytnú informácie označené ako dôverné, nesmie strana, ktorej sa tieto informácie poskytli, prezradiť ich tretej osobe a ani ich použiť v rozpore s ich účelom pre svoje potreby, a to bez ohľadu na to, či dôjde k uzavretiu zmluvy, alebo nie.Proti porušeniu alebo ohrozeniu práva na obchodné tajomstvo prislúcha majiteľovi obchodného tajomstva právna ochrana.Common misconceptions
Labelling something secret without any further measures
The word confidential on a document expresses the will to keep it secret, but the fifth feature requires that the secrecy also be protected. Without restricted access, passwords and confidentiality agreements, protection fails exactly when it is needed.
The assumption that reverse engineering is a breach
The Act expressly carves out the study and disassembly of a product that is publicly available or that the person studying it lawfully owns. Protection against that comes from a patent or a utility model, not from a trade secret.
Confidentiality is dealt with only after the contract is signed
Information is most often handed over during the negotiations, that is earlier. The Act protects confidential information from negotiations even without an agreement, but the scope is then open to dispute, which is why the agreement is signed before the negotiations.
A confidentiality agreement without defining what is confidential
A clause that labels absolutely everything confidential is hard to enforce in a dispute. It is more useful to define the range of the information and the way it is marked.
Frequently asked questions
Is a customer list a trade secret?
It may be, if it meets all five features at once. What usually decides is whether it is commonly available and whether the company actually protects its secrecy. A list freely accessible to all employees and sent by e-mail without restrictions does not meet that condition.
How long does a trade secret last?
For as long as the facts that define it last. Once the information becomes commonly available in business circles, the protection ceases.
Do I need a confidentiality agreement when I have a trade secret?
The protection applies by law even without one, but the agreement is evidence that you protect the secrecy, it defines the scope of the confidential information and it lets you agree a contractual penalty instead of proving the amount of the damage.
May an employee use what they learned once they have left?
General experience and knowledge acquired through work are not a trade secret and the employee may use them. Taking specific confidential materials out is a different matter. Competing activity as such can be restricted only by a non-compete clause with financial compensation.
Documents this affects
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