What is the difference between trade secrets and confidential information?

Trade secrets and confidential information have similarities and differences. In general, both are forms of proprietary information that companies try to protect from being disclosed publicly. However, there are some key differences between them. Trade secrets in the state of Illinois are protected by the Trade Secrets Act. Under this Act, a trade secret is defined as “information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” This means that a trade secret is information that gives a company economic value, and the company has taken reasonable steps to keep it a secret. On the other hand, confidential information is not protected by the Trade Secrets Act. Instead, it is often protected through non-disclosure agreements. Generally, confidential information is material that is not publicly available and is shared between the parties in a confidential manner. While the parties may agree to keep the information confidential, they are not legally obligated to do so. Additionally, parties can lose their rights to confidential information if it is illegally obtained or shared with a third party. In summary, trade secrets are legally protected through the Trade Secrets Act and are information that has economic value and is kept secret by reasonable steps. Confidential information is not protected by the Act and is information that is shared between two parties in a confidential manner.

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What is the difference between trade secrets and confidential information?

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