Luxembourg: Trade Secrets – The Need To Be Systematic

Last Updated: 15 August 2019
Article by Dallas Wilkinson and John Walker

The term "trade secret" is invariably included in any definition of "Intellectual Property." However, while the majority of IP types are subject to strict rules, guidelines and timeframes due to the requirement of registration (e.g. patents, designs and trademarks), trade secrets do not require such formalities. Or do they?

Most people are aware of the Coca-Cola story – possibly the world's most famous trade secret - whose recipe has been kept secret since 1886.  This has been the result of a carefully considered protection and "disclosure" strategy whereby access to the secret is strictly limited and restricted. While such a recipe can be a trade secret, virtually anything that adds value to a business can be regarded as a trade secret, and can include any method, formula, device, process or any information (technical or business, e.g., a list of suppliers) that gives its owner a competitive advantage. Even the results of failed R & D programs might be considered as a trade secret – providing a springboard for new research directions. Further, these trade secrets may be stored in a variety of ways ranging from traditional paper copies (e.g. reports and manuals) to computer and other digital forms, or even retained in the mind of employees without any documentation.

Before embarking on a trade secret protection strategy, the owners must first ask several key questions:

  • Do they know the information is actually a secret (confidential)?
  • Do they know they have them?
  • Who controls the secret information ?
  • Where is the information held, how and in what form?
  • Who has or has had access (both internally and externally)?
  • Who needs to know the trade secret in its entirety or can the secret be broken up, so only few people know the entire secret? This is an effective control measure.

Additional questions include:

  • What value does the owner place on these secrets?
  • Is this value understood widely or only by a select group of individuals?
  • Is the value realized in the short term or long term?

Once this analysis has been undertaken, consideration is required as to how such secrets might be disclosed – inadvertently or deliberately. Disclosure might be through publication, at a seminar, during meetings, informal conversations, accidental or inadvertent disclosure, as well as theft. On occasion, a small amount of information may be released in order to create value, build up a brand or support other commercial reasons. Except for theft, all of these disclosure mechanisms can be controlled or minimized by effective policies, procedures and systems.

Having identified the nature of the secrets and how they might be disclosed, the next consideration is to identify the risks in the business or technical environment where inappropriate disclosure may occur. In simple terms, these sources of risk might be external or internal. External sources include competitors (naturally) as well as any entity who the owner may have some (potential or existing) collaboration or business relationship with – licensees, JV partners, customers, suppliers, toll manufacturers, consultants, etc. The most pertinent source of internal risk are the employees themselves and the owner's lack of confidentiality policies or processes.

Typical requirements of a Confidential Disclosure Agreements include defining the information being disclosed, the purpose of such disclosure, the duration of the secrecy obligation and how the information is disclosed.

As already indicated, trade secrets are not registrable but are the subject of common law. Although the foregoing has set out several questions a trade secret owner must consider, ultimately the owner must be in a position to take legal action for the misappropriation or misuse of trade secrets, particularly where there has been a considerable commercial loss – somewhat analogous to patent infringement. To enhance the likelihood of a successful legal outcome, the courts will need to assess whether the secret was, in fact, something the public or industry did not know or could easily find out, whether the secret provided the owner with a competitive advantage, and importantly whether there had been reasonable efforts by the owner to maintain its secrecy. Some of these efforts or approaches, as well as their practical considerations, are identified below.

Like any business process, it is often advisable to conduct a risk assessment on the trade secret and understand the elimination and mitigation controls an organization can put in place to manage the secret. Confidential Disclosure Agreements (CDA), often called Non – Disclosure or Secrecy Agreements (NDA), are a  common  protection technique. Typical requirements of a CDA include defining the information being disclosed, the purpose of such disclosure, the duration of the secrecy obligation and how the information is disclosed (e.g. written, verbal etc). Of course, all of these specifics relate back to the initial questions referred to earlier – identifying the secret, how the secret might be disclosed and the sources of risk. In addition to the use of a suitably crafted CDA to reflect the business environment and objectives, the owner has other techniques at its disposal to mitigate or minimize disclosure risks. These can include marking materials as "Confidential", securing the documentation, limiting copies, developing physical and other security measures (e.g. passwords) or limiting access to only segments of the secret. For example, the "Coca-Cola technique" includes maintaining registers of disclosures, appropriate employment agreements, as well as clear and concise communication of secrecy policies and educating employees of the owner's policies and procedures.

The protection of a trade secret requires different considerations from IP protection through a registration system such as patents. To obtain a patent and thereby protection, the applicant must comply with stated rules, whether such rules relate to patentability criteria, meeting timelines, disclosing the technology to the public or paying fees. Whether this patent protection is at a local or international level, these rules are clearly defined and set by a national or international government agency. It is with this background that IP databases have developed to systemize these externally imposed rules and requirements. Nonetheless, successful trade secret protection requires the consideration of a wide range of parameters – albeit less rigid than patents, as well as a diverse set of processes and policies. When these parameters, processes and policies are assessed, a more formalized and systematic approach to trade secret protection can be developed.

The Dennemeyer Group provides a wide range of IP protection and management services to clients throughout the world. As a result, Dennemeyer is particularly well placed to advise business owners on strategies for the overall protection of their intellectual assets, including the development and implementation of trade secret protection strategies consistent with protection through established IP registration regimes.

This article is based on a lecture given on "Technology commercialization and Trade Secrets" in Germany, January, 2019.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
ELVINGER HOSS PRUSSEN, société anonyme
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
ELVINGER HOSS PRUSSEN, société anonyme
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions