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Protection of a trade secret is set forth in Chapter B of the Commercial Torts Law, 5759 – 1999. This law defines a trade secret as, “Business information of any type that is not in the public domain and that cannot be easily lawfully discovered by others, whose confidentiality grants its owner a business advantage over his competitors, provided that its owner takes reasonable steps to protect its secrecy.”
The definition does not restrict the form of the trade secret, meaning: it can be in the form of a formula, table, plan, work method, invention, or combination of information that was collected with great effort. Accordingly, a trade secret can be a formula for a chemical compound (such as the formula for manufacturing “Coca-Cola”), a manufacturing process, a product handling or maintenance secret, a chart, or the plan for a machine, and even a customer list.
With that, the law sets forth a number of foundational requirements for granting protection to a trade secret:
Taking those same “reasonable measures” is critical to maintain the protection, and business owners and companies must formulate a policy to protect trade secrets that will make it possible to prove that the trade secret was indeed kept secret. Thus, for example, failure to lock a computer containing confidential information can be considered as failure to take reasonable measures to protect the secrecy of a trade secret, whereas having employees sign a nondisclosure agreement, noncompete clauses, and distributing memoranda to employees regarding their obligation to maintain confidentiality will all be considered reasonable measures to protect a trade secret. Marking documents as confidential and shredding them after use, or signs limiting access to areas of a business where trade secrets are located, can prove that reasonable measures have been taken.
