A trade secret is one of the most important intellectual property assets of a business, but it can also be easily leaked if not properly managed. Unlike a trademark or an invention, rights to a trade secret do not arise from a registration procedure. Instead, they are established based on the lawful acquisition of information and the application of necessary confidentiality measures. This article, prepared by Tran & Tran, helps businesses understand what a trade secret is, the conditions for protection, practical examples, infringement risks, and how to build an appropriate protection mechanism.
What is a trade secret?
A trade secret is information obtained from financial or intellectual investment activities, has not been disclosed, and is capable of being used in business. It is an object of industrial property rights under Vietnamese intellectual property law.
In simple terms, a trade secret is information that has value for a business, is not publicly disclosed, and is controlled by the business through appropriate confidentiality measures. Such information may help a business create a competitive advantage, optimize costs, develop products, serve customers, or maintain its market position.
Unlike tangible assets such as machinery, factories, or goods, a trade secret is an intangible asset. Its value lies in the fact that others cannot easily know or access it. Once the information has been lawfully disclosed to the public, its protectability as a trade secret may be significantly affected.
Examples of trade secrets
Trade secrets may exist in many departments of a business, from production, technology, research and development to sales, finance, operations, and customer management. Trade secrets are not limited to technology corporations or manufacturing companies. A service company, trading business, distributor, or startup may also own valuable information that needs protection.
Examples of trade secrets may include:
- Undisclosed production formulas;
- Technical processes or special operating procedures;
- Customer lists, transaction history, and purchasing needs;
- Pricing strategies, discount policies, and sales plans;
- Market data and internal analysis reports;
- Research and product development documents;
- Software source code, algorithms, or unpublished technical solutions;
- Supplier lists, commercial terms, and special purchase prices;
- Product launch plans, marketing campaigns, or market expansion strategies.
However, not all internal information automatically qualifies as a trade secret. To be protected, information must satisfy legal conditions, and the business must be able to prove that necessary confidentiality measures have been applied.
Does a trade secret need to be registered?
A trade secret is not protected through an application and certificate-granting mechanism like a trademark, invention, or industrial design. Industrial property rights to a trade secret are established based on the owner’s lawful acquisition of the information and implementation of confidentiality measures.
This means that a business does not need to file a trade secret registration application with the Intellectual Property Office of Vietnam to obtain protection. However, the absence of a registration requirement also creates a higher evidentiary burden. In a dispute, the business must prove that the information is truly a trade secret, was lawfully created or obtained, has business value, and was protected by appropriate confidentiality measures.
A business should not merely state in general terms that “all internal information is confidential.” A more effective approach is to identify which categories of information need protection, who is allowed to access them, the scope of access, and where confidentiality obligations are recorded.
Conditions for protecting a trade secret
Under Article 84 of the Law on Intellectual Property, a trade secret is protected if it satisfies the following basic conditions: it is not common knowledge and is not easily obtainable; when used in business, it gives the holder an advantage; and it is protected by its owner through necessary measures so that the information is not disclosed and is not easily accessible.
| Condition | Meaning |
| The information has not been disclosed | The information has not been widely publicized or made easily accessible |
| It is not common knowledge | It is not industry-common knowledge or information that can be easily collected |
| It can be used in business | It may create commercial value, competitive advantage, or economic benefit |
| It has been lawfully obtained | The information was created, collected, transferred, or accessed lawfully |
| Necessary confidentiality measures are in place | NDA, internal regulations, access control, permission management, and document control may be used |
| It is not easily accessible | Unauthorized persons cannot access the information easily |
In practice, the requirement of “necessary confidentiality measures” is often overlooked by businesses. If information is stored openly in a shared system, sent to many people who do not need to know it, lacks access control, or is not covered by confidentiality agreements, proving rights to a trade secret may be difficult.
What information is not protected as a trade secret?
Not every piece of information that a business wants to keep confidential can be protected as a trade secret. Even if certain information is important internally, it may not qualify for protection if it has been disclosed, is easily obtainable, or is not properly protected.
Information that is often difficult to protect as a trade secret includes:
- Information already disclosed on websites, catalogues, newspapers, social media, or marketing materials;
- Common industry knowledge known by many entities in the same field;
- Information that can be easily inferred or obtained from products sold publicly;
- Information without business value;
- Information not controlled by the business through confidentiality measures;
- Data obtained lawfully by others through independent research or other lawful methods.
Therefore, to protect information effectively, a business should distinguish between ordinary internal information and information that qualifies as a trade secret. This classification helps the business focus its confidentiality resources on truly important information assets.
How is a trade secret different from an invention?
Businesses that have a technical solution, formula, or new process often hesitate between keeping it as a trade secret or registering it as an invention. Both mechanisms can protect technological advantages, but their methods of establishing rights and their risks are very different.
| Criteria | Trade secret | Invention |
| Method of protection | No registration; protection depends on secrecy and confidentiality measures | Filing an application and obtaining a patent if conditions are met |
| Disclosure of information | Not disclosed | Technical content must be disclosed in the application |
| Term of protection | May last as long as the information remains secret and is protected | Limited term under the protection title |
| Risks | Advantage may be lost if information is disclosed or lawfully obtained by others | May be refused if novelty, inventive step, or industrial applicability requirements are not met |
| Suitable for | Formulas, data, and processes that are difficult to detect from the outside | Technical solutions that can be registered and require clear exclusivity |
If a technical solution can be easily discovered from a product sold on the market, the business should consider whether invention registration is appropriate. Conversely, if the information is difficult to reverse-engineer, can be well controlled internally, and needs long-term confidentiality, protection as a trade secret may be more suitable.
How is a trade secret different from a trademark and copyright?
Trade secrets, trademarks, copyright, and inventions are all intellectual property assets, but each protects a different type of value. A business should distinguish them correctly to choose the right protection strategy.
| Object | What does it protect? | How are rights established? |
| Trade secret | Confidential information with business value | Lawful acquisition and confidentiality measures |
| Trademark | Signs used to distinguish goods or services | Usually through registration |
| Copyright | Creative works expressed in a certain form | Arises when the work is created and expressed |
| Invention | Technical solutions | Through registration and patent grant |
For example, a business may protect a product name through a trademark, protect manuals or software through copyright, protect a technical solution through an invention, and protect customer data, internal formulas, or pricing strategies as trade secrets.
Who owns a trade secret?
The owner of a trade secret is the organization or individual that lawfully obtains the trade secret and implements measures to keep it confidential. Where a trade secret is created during hired work or the performance of assigned duties, ownership usually belongs to the hiring party or assigning party, unless otherwise agreed by the parties.
In employment relationships, employees may directly create, access, or operate confidential information. However, this does not mean that employees automatically have the right to use such information for personal purposes or transfer it to third parties.
To avoid disputes, businesses should clearly regulate ownership of information, permitted scope of use, confidentiality obligations during employment and after termination in employment contracts, service contracts, non-disclosure agreements (NDAs), and internal regulations.
Common acts of trade secret infringement
Acts of trade secret infringement may arise from various sources, such as internal staff, former employees, partners, contractors, suppliers, or competitors. Under the referenced provisions of the Law on Intellectual Property, acts such as accessing or collecting information by bypassing confidentiality measures, disclosing, or using a trade secret without authorization may be considered infringements of rights to trade secrets.
Common acts include:
- Accessing or collecting a trade secret by bypassing confidentiality measures
For example, unauthorized system access, unauthorized copying of documents, exceeding access rights, or extracting data from internal devices. - Disclosing a trade secret without permission
Employees, partners, or contractors disclose confidential information to third parties without the owner’s consent. - Using a trade secret without the owner’s authorization
An individual or organization uses customer data, formulas, processes, pricing strategies, or source code to compete or gain improper benefits. - Breaching confidentiality obligations under contracts or internal regulations
Violating an NDA, employment contract, cooperation agreement, service contract, or company confidentiality policy. - Using a trade secret despite knowing or having reason to know that the information originated from an unlawful act
A third party receives, exploits, or commercializes information even though it knows, or has grounds to know, that the information was obtained unlawfully.
What should a business do to protect trade secrets?
To protect trade secrets, a business should not simply declare that information is confidential. It is essential to build a practical confidentiality system that can be applied and proven if a dispute occurs.
Measures a business should implement include:
- Identifying a list of trade secrets;
- Classifying confidentiality levels of information;
- Issuing internal confidentiality regulations;
- Signing NDAs with employees, partners, and contractors;
- Including confidentiality obligations in employment and service contracts;
- Granting data access based on job position and necessity;
- Marking important documents as “Confidential”;
- Controlling copying, downloading, and forwarding of documents;
- Managing devices, emails, accounts, and storage systems;
- Revoking access rights when an employee leaves or a partner’s contract ends;
- Training employees on information confidentiality;
- Keeping access logs and evidence of confidentiality controls.
A strong confidentiality system should combine legal, technical, and internal governance measures. If a business only has an NDA but does not control access rights, or only has technical systems but no confidentiality obligations, it may still face risks when proving its protection measures.
What should a business do when a trade secret is leaked?
When a business suspects that a trade secret has been leaked or used without authorization, it should act quickly but carefully with respect to evidence. A slow response may allow the information to spread further, while unsupported action may create disadvantages in a dispute.
Step 1: Determine whether the leaked information qualifies as a trade secret
The business should assess whether the leaked information satisfies protection conditions, has business value, and was previously subject to confidentiality measures.
Step 2: Identify the source of the leak
The business should determine whether the information may have been leaked by employees, former employees, partners, contractors, technical systems, emails, personal devices, storage platforms, or internal communication channels.
Step 3: Collect and preserve evidence
The business should record emails, access logs, copied documents, messages, contracts, NDAs, internal regulations, download history, and evidence of unauthorized use of the information. Evidence should be collected lawfully so that it can be used in dispute resolution.
Step 4: Activate urgent measures
Possible measures include revoking access rights, changing passwords, locking accounts, requesting removal of information, sending a cease-and-desist letter, and requesting the return or destruction of confidential documents.
Step 5: Assess legal options
Depending on the seriousness of the violation, the business may consider negotiation, compensation claims, labor disciplinary action, civil action, administrative measures, or other legal options. The chosen approach should be based on the actual case file, available evidence, damages, and the business objectives of the company.
Common risks in protecting trade secrets
Many businesses only pay attention to trade secrets after a leak has occurred. At that point, remediation is often much more difficult than establishing a protection mechanism from the beginning.
- Failing to clearly identify what qualifies as a trade secret
A business may have many types of internal information but does not classify them, create a list, or determine the importance level of each category. - Not having an NDA or confidentiality agreement
When a leak occurs, it may be difficult to prove that the person accessing the information had specific confidentiality obligations. - Loose access control
Employees who are not relevant to the information can still access customer data, source code, formulas, processes, or internal reports. - Failing to revoke access rights after employment ends
This is a major risk for customer data, operating processes, software source code, and internal documents. - Failing to keep evidence of confidentiality measures
In a dispute, the business may have difficulty proving that it applied necessary measures to protect the information. - Confusing trade secrets with inventions
Some information should be registered as an invention, but the business keeps it secret ineffectively, resulting in the loss of competitive advantage. - Sharing information with partners before signing a confidentiality agreement
Exchanging technical documents, special quotations, customer data, or business plans before confidentiality obligations are in place may create significant risks.
When should trade secret consulting services be used?
A business should consider using trade secret consulting services when internal information has high commercial value and relates to technology, customers, data, formulas, processes, or business strategies.
Services should be considered when:
- The business has undisclosed formulas, processes, customer data, or technology;
- There is a risk that former employees or partners may use confidential information;
- The business needs to prepare NDAs, confidentiality regulations, or confidentiality clauses in contracts;
- The business needs to assess which information qualifies as a trade secret;
- The business needs to handle leakage or unauthorized use of trade secrets;
- The business needs to choose between maintaining trade secret protection and registering an invention;
- The business needs to build an internal intellectual property protection system;
- The business needs to standardize handover, access control, and access revocation procedures.
Early consultation helps a business not only address legal risks but also build a culture of confidentiality, reduce the risk of data loss, and protect long-term competitive advantages.
Trade secret consulting services at Tran & Tran
Tran & Tran is an industrial property representative organization recognized by the Intellectual Property Office of Vietnam since 2013. With experience in intellectual property rights consulting, invention and trademark registration, transfer contracts, and dispute handling involving intellectual property assets, Tran & Tran supports businesses in building appropriate mechanisms to protect trade secrets.
Tran & Tran’s services may include advising on what a trade secret is and its protection conditions, reviewing the business’s list of confidential information, assessing whether information can be protected as a trade secret, and advising on the choice between trade secret protection and invention registration.
In addition, Tran & Tran supports drafting or reviewing NDAs, confidentiality agreements, confidentiality clauses in employment contracts, service contracts, and cooperation agreements; advising on internal confidentiality regulations; assisting in evidence collection when information leaks occur; advising on the handling of trade secret infringement; and representing clients in working with infringers or competent authorities based on the actual case file.
Businesses may send a description of the information to be protected, how the information was created, the scope of persons with access, and existing confidentiality documents to Tran & Tran for assessment of the protectability of the trade secret and advice on suitable protection measures.
Conclusion
A trade secret is an intellectual property asset of significant value to businesses, especially in manufacturing, technology, commerce, services, research and development, and customer management. Rights to a trade secret do not depend on registration procedures, but on the lawful acquisition of information and the implementation of necessary confidentiality measures.
To protect trade secrets effectively, a business should identify its list of confidential information, control access rights, sign NDAs, issue confidentiality regulations, keep evidence of confidentiality measures, and establish a response procedure for leaks. For information with high technical value, businesses should also consider the strategy between maintaining it as a trade secret and registering it as an invention.
Contact Tran & Tran for advice on protecting trade secrets, building internal confidentiality mechanisms, reviewing NDAs, and handling unauthorized use of confidential information based on the actual case file.
FAQ about trade secrets
What is a trade secret?
A trade secret is information obtained from financial or intellectual investment activities, has not been disclosed, and is capable of being used in business.
Does a trade secret need to be registered?
No. Rights to a trade secret are established based on the owner’s lawful acquisition of the information and implementation of necessary confidentiality measures, not through registration procedures like trademarks or inventions.
What are the conditions for protecting a trade secret?
The information must not be common knowledge, must not be easily obtainable, must give the holder an advantage when used in business, and must be protected by necessary confidentiality measures.
What are examples of trade secrets?
Examples may include production formulas, technical processes, customer lists, pricing strategies, market data, software source code, or unpublished product research documents.
How is a trade secret different from an invention?
A trade secret is protected as long as the information remains secret and is properly protected. An invention requires filing an application, disclosing the technical solution, and obtaining a patent if protection conditions are met.
What should a business do if a trade secret is leaked?
The business should determine whether the leaked information qualifies as a trade secret, identify the source of the leak, collect evidence, apply urgent measures, and assess legal options based on the actual case file.
