What is the difference between trade secrets and confidential information?

Trade secrets and confidential information are both forms of legal protection for businesses in California. However, the two terms have distinct legal meanings. Trade secrets refer to information that is not generally known by members of the public and is kept secret by the company for economic benefit. These secrets can include processes, formulas, recipes, techniques, or any other specific information that gives a company an edge over competitors. This information usually has independent economic value as a result of not being generally known. Confidential information is different from trade secrets in that it does not possess economic value and does not give the company an advantage over competitors. Rather, confidential information refers to any information that is not publicly available and is shared by two or more parties, such as a confidentiality agreement. This information can include data, customer files, financial records, personnel files, and more. The purpose of a confidentiality agreement is to protect both parties from disclosing sensitive information without permission. In essence, trade secrets are more valuable and secret than confidential information, as they give companies an economic edge over competitors. On the other hand, confidential information is shared between two parties, and its disclosure is restricted by a confidentiality agreement. Both trade secrets and confidential information are protected under California law, with serious consequences for those who violate them.

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