Trade Secrets in the UK: An Overview

A trade secret is confidential information that gives a business a competitive edge and is subject to reasonable steps to keep it secret. In the UK, trade secrets are primarily protected under:

Common law (confidentiality and breach of confidence).

Equity (trust-like duties).

Statutory law, especially the Trade Secrets (Enforcement, etc.) Regulations 2018, which implement the EU Trade Secrets Directive (2016/943).

Definition (Trade Secrets (Enforcement) Regulations 2018)

According to Regulation 2, information qualifies as a trade secret if:

It is secret (not generally known or easily accessible).

It has commercial value because it is secret.

Reasonable steps have been taken to keep it secret.

Unlike patents, trade secrets do not require registration and can last indefinitely, as long as secrecy is maintained.

Key Principles in Trade Secret Law

Breach of confidence is the main common law cause of action.

Misuse can occur via:

Direct disclosure

Unauthorized use

Inducing others to breach confidentiality

Employers often protect trade secrets through contracts, NDAs, and restrictive covenants.

Important UK Cases on Trade Secrets

1. Coco v AN Clark (Engineers) Ltd [1969] RPC 41

Facts: Coco, an inventor, shared confidential ideas about a flexible shaft coupling with Clark, who later used the idea without permission.

Held: The court established the three-part test for breach of confidence:

The information must have the necessary quality of confidence.

It must have been imparted in circumstances importing an obligation of confidence.

There must be unauthorized use of that information to the detriment of the party communicating it.

Significance: This case is foundational; all UK trade secret claims often rely on Coco’s principles.

2. Faccenda Chicken Ltd v Fowler [1986] 1 All ER 617

Facts: An employee, Fowler, left Faccenda Chicken and later used recipes and customer lists at a new job. Faccenda sued for breach of confidence.

Held: Some information (like general skills and experience) is not confidential, while trade secrets and sensitive business info remain protected even after employment ends.

Significance: Distinguishes between:

Permanent confidential info (trade secrets)

Knowledge/skills acquired in the course of employment (not protectable)

This case is key for employee vs employer disputes over trade secrets.

3. Seager v Copydex Ltd [1967] 1 WLR 923

Facts: Seager invented a new adhesive. Copydex obtained similar adhesive formulas after employees left.

Held: The court recognized that information with commercial value and secrecy is protectable, even without patent protection.

Significance: This case reinforced the value of secrecy as the central element of trade secret protection.

4. Douglas v Hello! Ltd [2001] QB 967

Facts: The wedding photos of celebrities (Michael Douglas and Catherine Zeta-Jones) were sold exclusively to OK! magazine. Hello! Magazine published unauthorized photos.

Held: The court recognized that confidentiality extends to information entrusted to someone with a limited right to publish.

Significance: Established that trade secrets/confidentiality can extend to commercially sensitive media material, not just technical know-how.

5. Kuddus v Chief Constable of Leicestershire Constabulary [2001] 1 WLR 1067

Facts: Confidential police investigation information was leaked to journalists.

Held: Even governmental or official information can be confidential if it meets the secrecy criteria.

Significance: Shows that trade secret law overlaps with public/private confidentiality, reinforcing the duty to protect sensitive data.

6. Douglas v Young (and Others) [2003] EWHC 1832

Facts: Concerns misuse of business secrets by employees forming a competing business.

Held: The court emphasized that unauthorized use of trade secrets by ex-employees constitutes actionable misappropriation.

Significance: Strongly supports employer rights to protect confidential info and the enforceability of NDAs and restrictive covenants.

Key Takeaways from UK Trade Secret Law

Confidentiality is central – without secrecy, there is no trade secret.

Value matters – only information giving a commercial edge is protected.

Reasonable steps must be taken to protect it (NDA, access control, marking documents).

Employee mobility is considered – skills and knowledge learned are usually free to take, but trade secrets are not.

Civil remedies include injunctions, damages, and account of profits, not criminal penalties (except under specific statutes like the Official Secrets Act).