Keeping something quiet doesn’t make it a trade secret. That surprises a lot of owners. The supplier list you’ve never shared, the pricing formula in your head, the way you sequence jobs so the crew never sits idle, most of that is probably not protectable in any meaningful legal sense. Not because the law doesn’t care about secrets, but because you haven’t treated it like one.
We see this gap constantly in Sale Ready engagements. An owner lists “proprietary processes” as an asset, a buyer’s advisor asks how they’re protected, and the honest answer is “nobody’s ever asked about them”. That’s not protection. That’s luck.
What counts as a trade secret in Australia?
A trade secret is generally confidential business information that has commercial value because it’s secret, and that the business has taken deliberate, provable steps to keep secret. All three parts matter. Information that’s genuinely secret but worthless commercially doesn’t qualify. Valuable information that anyone in the industry could work out doesn’t qualify either. And valuable, genuinely secret information that sits in an open shared drive is on very shaky ground.
Here’s the part that catches people out: in Australia there’s no trade secret register. You can’t file one, certify one, or get a certificate for one the way you can register a trademark or apply for a patent through IP Australia. Protection generally comes from confidentiality obligations, from contracts, and from how the information is actually handled day to day. The paperwork and the behaviour have to match.
The three questions a lawyer will usually ask about your secret
When a lawyer assesses whether information is protectable confidential information, the questions commonly come down to something like this: Is it actually secret? Does its secrecy give it commercial value? And have you treated it as confidential in practice?
The third question is where most businesses fall over. In reviews we run, we regularly find the “secret” costing model saved in a folder every employee and two former contractors can still access. No confidentiality clauses in the employment contracts. No marking on the documents. No exit process when people leave. Each of those things is fixable, but a lawyer can’t retrofit secrecy after the information has already walked out the door.
One more filter worth applying early. Could a competent competitor reverse-engineer it from your product, your website or your public pricing? If yes, it’s probably not a secret at all, whatever you call it internally.
Can you protect what’s in an employee’s head?
Generally, the skill, experience and general know-how an employee builds up while working for you belongs to them, and they commonly take it to their next job. Courts and lawyers tend to distinguish between an employee’s general professional knowledge, which usually can’t be locked down, and specific confidential information belonging to the business, which often can be.
The practical difference looks like this:
| Protectable confidential information | General know-how | |
|---|---|---|
| Nature | Specific, identifiable, written down | Skills and experience |
| Examples | Formulas, source code, customer pricing data | Sales technique, trade skills |
| Leaves with staff? | Generally no, if handled properly | Generally yes |
| Needs active steps? | Yes, always | Can’t be fenced anyway |
A useful test we give owners: can you point to the thing? A recipe, a dataset, an algorithm, a costed supplier agreement, those are things. “Our people just know how we do it” is not a thing. It’s culture and training, which are valuable, but they’re protected by retention and documentation, not by confidentiality law.
This is also where employment contracts earn their keep. Well-drafted confidentiality and restraint provisions can matter a great deal, and badly drafted ones can be worth very little. The Fair Work Ombudsman publishes general guidance on employment contracts, but the drafting itself is a job for a lawyer who knows what a court will actually look at.
Why silence alone rarely protects anything
Silence is passive. Protection is active. If a dispute ever arises, the question is unlikely to be “did you tell anyone?” and far more likely to be “what did you do to keep this confidential?” A business that can’t answer that question with specifics is generally in a weak position, however genuinely secret the information was.
Active protection usually involves a handful of unglamorous habits:
- Confidentiality obligations in employment contracts, contractor agreements and NDAs before sensitive conversations, not after.
- Access limited to people who need it. If all 14 staff can open the pricing model, it’s hard to argue it was treated as a secret.
- Documents actually marked as confidential.
- An exit process that revokes access and reminds departing staff of their obligations in writing.
- A simple record of what the business considers its confidential information. Buyers ask for this during due diligence, and almost nobody has it.
None of this is expensive. Most of it is a Tuesday afternoon plus a lawyer reviewing the contract templates. The businesses that skip it tend to discover the gap during a sale process or the week after a senior salesperson resigns, which are the two most expensive moments to discover anything.
Trade secret or patent: the trade-off nobody explains properly
A patent gives you a time-limited registered monopoly in exchange for publishing exactly how your invention works. A trade secret can last indefinitely, but only for as long as you actually keep it secret, and it offers no protection if someone independently invents or reverse-engineers the same thing.
That’s a genuine strategic choice, not a formality. Something that competitors could reverse-engineer from the product itself is usually a poor candidate for secrecy. Something embedded in your internal process, invisible from the outside, might be better kept confidential than published in a patent application for the world to read. IP Australia’s website covers what patents involve, and business.gov.au has plain-language material on the different types of IP protection. Which route suits your situation is exactly the question to put to qualified counsel, because getting it wrong is generally irreversible. Once information is published or leaked, secrecy is gone for good.
Everything above is general information, not legal advice. The line between protectable confidential information and general know-how gets drawn on the specific facts, and that’s where specific advice matters.
Common questions about trade secrets
What qualifies something as a trade secret?
Information generally qualifies as a trade secret when it’s genuinely secret, has commercial value because it’s secret, and the business has taken deliberate steps to keep it confidential. All three elements usually need to be present.
What is a trade secret in Australia?
In Australia, a trade secret is confidential business information protected through confidentiality obligations and contracts rather than registration. There is no Australian trade secret register, so protection depends heavily on how the business handles the information in practice.
What is an example of a trade secret?
Common examples include product formulas and recipes, manufacturing processes, source code, customer databases with pricing history, and detailed supplier cost arrangements. The famous soft drink formula example gets quoted a lot, but for most small businesses it’s the costing spreadsheet or the customer pricing data that matters.
What may constitute a trade secret?
Almost any specific, identifiable business information may constitute a trade secret if secrecy gives it value and it’s actively protected. General industry knowledge, publicly available information, and an employee’s accumulated skills generally can’t constitute one.
Can I protect a trade secret with a patent?
No, they’re alternatives, not a combination. A patent requires publishing how the invention works, which destroys secrecy, while keeping something secret means forgoing the registered monopoly a patent provides.
Do trade secrets expire?
Trade secrets have no fixed expiry. Protection can last indefinitely, but it generally ends the moment the information becomes public, is independently discovered, or the business stops treating it as confidential.
What happens to trade secrets when an employee leaves?
An employee’s general skills and experience typically leave with them, while specific confidential information usually remains subject to obligations that can survive employment, particularly where the contract addresses it. An exit process that revokes access and confirms obligations in writing makes a real practical difference.
If you’re not sure which parts of your business would actually hold up as confidential information, that’s a worthwhile conversation to have before a sale, a hire or a partnership forces the question. The legal side of our practice, working with partner counsel, can look at what you’ve got and what’s actually protecting it. Get in touch for a first conversation and we’ll tell you plainly where you stand.