Learn about business secrets in Australia

Protecting business secrets in Australia is extremely important, it is like a solid shield to protect the fruits of labor and creativity of businesses. Business secrets are valuable intangible assets, the key for businesses to create competitive advantages, attract investment and develop sustainably. If not protected, sensitive information can be exploited by competitors, causing serious damage to businesses. Therefore, building a strict and comprehensive security system is essential to ensure the long-term success of the business. Viet An Law would like to guide customers on how to protect business secrets in Australia through the article below.

Learn about the definition of business secrets in Australia

Under Australian law, “trade secrets” are considered a form of confidential information and there is no exact definition. Australian law does not provide a specific definition for the term. However, to be considered a trade secret, it must generally meet the following criteria:

• Confidentiality: Information is not publicly available or easily accessible to people in the industry or field involved.
• Commercial value: The information must have commercial value because of its security.
• Reasonable security measures: The owner of the information must take reasonable measures to maintain confidentiality, such as entering into confidentiality agreements or restricting access.

It is worth noting that trade secrets are protected by the general confidentiality principles of common law, and not by specific legal provisions. This means that the protection of trade secrets in Australia is highly dependent on court rulings and fairness principles.

Good examples of business secrets in Australia include:

• Customer List
• Supplier List
• Production Techniques
• Technical Design
• Marketing Strategy
• Financial Information
• Software Source Code

Learn about trade secret breaches in Australia

• Disclosure of Confidential Information:
  • Intentionally or unintentionally revealing confidential information to unauthorized persons.
  • Using confidential information to compete unfairly.
• Unauthorized use of confidential information:
  • Use confidential information to create a competitive product, service, or process.
  • Copy or falsify confidential information.
• Unauthorized access to confidential information:
  • Unauthorized intrusion into computer systems or databases to steal information.
  • Stealing or stealing documents containing confidential information.
• Violation of confidentiality agreements:
  • Violation of the terms of the confidentiality contract, non-disclosure agreement.

Learn about dealing with trade secret breaches in Australia

Business secrets in Australia are protected by the general confidentiality principles of common law, not by specific legal provisions. This means that the protection of trade secrets in Australia is highly dependent on court rulings and fairness principles.

Common law

What is Common Law?

Common law, also known as case law, is a legal system that develops based on court rulings. Instead of relying entirely on laws promulgated by the National Assembly, ordinary laws are formed from legal precedents created through specific cases.

The main characteristics of common law

• Based on precedent: Past court rulings become precedent for similar cases in the future. The court will refer to previously resolved cases to make a decision for the current case.
• Flexibility: Conventional law is highly flexible, able to adapt to changes in society and technology.
• Unwritten: Common law is not recorded as a complete set of laws but is found in court rulings.

Common law in protecting trade secrets in Australia

Common law plays an important role in protecting trade secrets in Australia. While there is no specific law that defines “trade secrets” in detail in Australian law, common law principles, particularly the principles of confidentiality and breach of duty,  have been applied to protect sensitive business information.

Common law principles apply

• Privacy Guidelines:
  • Confidentiality: Information must be kept confidential and not made public.
  • Commercial value: The information must have commercial value for the business.
  • Security measures: Businesses must demonstrate that they have taken reasonable measures to protect information.
• Principles for breach of obligations:
  • Trust relationship: There must be a relationship of trust between the person who discloses the information and the person who receives the information.
  • Unauthorized use: The recipient of the information has used the information without permission.

Principle of Fairness

The principle of fairness plays an important role in protecting trade secrets in Australia, especially when there is no specific provision in the law. Australian courts often apply these principles to ensure that the protection of trade secrets takes place fairly and reasonably.

Key Principles of Equity

• Principle of balancing interests: The court will weigh the interests of the owner of the trade secret against the interests of the information user. If the use of the information causes significant damage to the owner, the court will tend to protect the owner’s rights.
• Good faith principle: The recipient of the information must use the information in good faith, not for the purpose of unfair competition or harm to the owner.
• Publicity Principle: Information is only protected when it is truly confidential and not public. If the information has been made public, it loses its confidentiality and is not protected by law.
• Principle of restriction: The protection of trade secrets must not excessively restrict the freedom of business of others. The court will consider factors such as the nature of the information, the level of investment of the enterprise in information protection to make a decision.

Learn about trade secret protections in Australia

To effectively protect business secrets in Australia, businesses need to combine various measures, both legal and technical. Here are some common and effective measures:

Legal measures

• Non-Disclosure Agreement (NDA): This is one of the most important legal tools to protect trade secrets. The NDA clearly stipulates the information that is considered confidential, the confidentiality obligations of the parties involved, and the legal consequences if violated.
• Internal regulations: Businesses should develop internal regulations on information security, including information processing procedures, access grants, and breach handling measures.
• Copyright registration: While it does not directly protect trade secrets, registering copyrights for inventions, designs, or works related to trade secrets can provide an additional layer of protection.
• Legal advice: Always consult a lawyer specializing in intellectual property for specific advice on legal issues related to the protection of trade secrets.

Technical measures

• Access Management System: Restrict access to confidential information to authorized persons only.
• Data encryption: Encrypt sensitive data to prevent unauthorized access.
• Data backups: Perform regular data backups to prevent data loss.
• Security software: Use antivirus software, firewalls, and other security tools to protect your computer system.
• Virtual office: Use virtual office services to secure information and minimize the risk of intrusion.

Management measures

• Employee training: Organize information security training courses for employees to increase their awareness and responsibility.
• Regular Audits: Conduct regular audits to assess compliance with security regulations.
• Build a culture of security: Create a corporate culture that values information protection.