Nigeria: Understanding Trade Secrets And How It Differs From Trademarks And Patents In Nigeria

Last Updated: 17 April 2018
Article by Davidson Oturu


This is the final part of the article where we will examine trade secrets. We will also distinguish trademarks, patents and trade secrets.

Definition of trade secrets

The Black's Law Dictionary defines trade secrets as "A formula, process, device, or other business information that is kept confidential to maintain an advantage over competitors; information — including a formula, pattern, compilation, program, device, method, technique, or process". Thus, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret.

As I referenced in the second part of this article, not all "inventions" can be protected as patents. As a result of this, scientific theories, food recipes, mathematical methods and commercial methods cannot be patented. You can read more on the part two of this series here. Part one of the article can also be read here as well.

However, certain "inventions" which are valuable can still be protected as trade secrets. It may be argued that strictly speaking, a trade secret is not an intellectual property right (IPR). However, in practice it has the same legal and commercial relevance as other IPRs and so it is dealt with in the same manner as other IPRs.

Article 39 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) provides for the protection of trade secrets. The TRIPS is an international legal agreement binding on all member nations of the World Trade Organisation (WTO). It sets out the minimum standards for the regulation by national governments of IPRS.

The factors that qualify confidential information as trade secrets are highlighted by TRIPS are as follows:

  1. It is a secret not generally known to the public;
  2. Due to the fact that the information is not publicly disclosed, it must have commercial value:
  3. It is the subject of reasonable efforts by the holder to maintain its secrecy.

Unique nature of trade secrets

Trade secrets can be broadly classified into two:

  1. trade secrets that protect inventions or manufacturing processes that do not meet the patentability criteria and therefore can only be protected as trade secrets. An example of this is a manufacturing process or customers list that cannot be protected as a patent but is considered valuable; and
  2. trade secrets for inventions that fulfil the patentability criteria and could therefore be protected by patents.

A unique trait of trade secrets is that they are protected without registration or any procedural formalities. Thus, unlike patents and trademarks that are registered for a period of time, a trade secret can be protected for an indefinite period, provided it is not disclosed to the public.

Furthermore, unlike the United States of America that has a Uniform Trade Secrets Act, trade secrets in Nigeria and several countries are not protected by statute but are governed by contract, tort and other basic legal principles.

Popular trade secrets

Some popular trade secrets include the following:


Rather than patent his formula, the inventor of the Coca-Cola soda, Mr. John Pemberton, decided to protect his recipe as a trade secret. In 1891, Asa Candler purchased the rights to the formula from Pemberton's estate and founded the Coca-Cola Company. The formula for the Coca-Cola drink has remained a trade secret ever since then. This may be considered as a good business move because if Coca-Cola had patented the formula (which is questionable) it may have been disclosed to the public.

However, the danger behind not patenting this valuable formula was seen when it was the subject of corporate espionage as in 2006, an employee stole the recipe and attempted selling it to Pepsi for $1.5 million. Although a fierce rival of Coca-Cola, Pepsi immediately notified the authorities and the employee was arrested and charged1.

The Google Search Algorithm

Google has almost become synonymous with the internet as it is the top search engine in the world today. Google's algorithm searches out web pages that contain the keywords used in a search. It then assigns a rank to each page based on several factors.

The algorithm used by Google for its search engine remains one of the most valuable trade secrets in the world.

Kentucky Fried Chicken

Kentucky Fried Chicken (KFC) is reportedly made with a secret recipe of 11 herbs and spices. Legend has it that the founder, Colonel Sanders, memorized the recipe and never disclosed it to anyone when he first started out. Today, the recipe is kept in a closely guarded safe in Kentucky. Only a few employees are aware of the contents and they are bound by a confidentiality agreement.

To show the extent to which this recipe is kept as a secret, a company blends the herbs while another company mixes the spices. They are then processed and sent to the different restaurants. KFC with this recipe has become the second largest restaurant in the world (measured after sales) and has a revenue of over $23bn2.

McDonald's Big Mac Special Sauce

The McDonald's Big Mac Special Sauce is so coveted that it was alleged in 2017 that it had been leaked online3.

The trade secret was so well kept that when it got missing in the 1980s, it was only one of the former CEOs, Mr. Fred Turner, who remembered it when he was re-hired by the company.

Protection of trade secrets

Due to the fact that trade secrets cannot be subject to public disclosure, owners of trade secrets protect them with legal and technological procedures. If the owner of a trade secret intends to disclose a trade secret to a third party, it is advisable that he executes a confidentiality agreement or a non-disclosure agreement (NDA) with the third parties as this may be the only way he may be able to protect his trade secret and prevent the third parties from using his invention or idea.

An NDA is an agreement that creates a confidential relationship between the parties whereby they agree to protect confidential and proprietary information or a trade secret.

An NDA can protect any type of information that is not generally known. However, NDAs can also contain clauses that will protect the person receiving the information so that if they lawfully obtained the information through other sources they would not be obligated to keep the information secret.

Some common issues covered under an NDA include:4

  • outlining the parties to the agreement;
  • the definition of what is confidential, i.e. the information to be held confidential.
  • the disclosure period – information not disclosed during the disclosure period (e.g., one year after the date of the NDA) is not deemed confidential;
  • the exclusions from what must be kept confidential.
  • the term and conditions (in years) of the confidentiality, i.e. the time period of confidentiality;
  • the term (in years) the agreement is binding;
  • permission to obtain ex-parte injunctive relief;
  • description of the actions needed to be done with the confidential materials upon agreement ending;
  • the obligations of the recipient regarding the confidential information:
  • types of permissible disclosure
  • the law and jurisdiction governing the parties.

Some additional ways owners of trade secrets can protect them include the following:

  1. Executing non-compete agreements with the employees. This agreement will place an obligation on the employees and prevent them from using trade secret even after they have stopped working for the employer.
  2. Keeping the trade secret in a safe location and granting access to a few individuals.
  3. Ensuring that the employees are loyal and will not sell the trade secret to competitors.


This three-part article has considered different intellectual property rights. In a nutshell, we can highlight the following differences that exist among trade secrets, trademarks and patents:

  1. Trade secret has the advantage of not being limited in time. Patents last for 20 years and trademarks last for 7 years although they are subject to renewal. A trade secret may therefore last indefinitely as long as it is not revealed to the public.
  2. Trade secrets do not need to be registered and they take immediate effect. Generally, trademarks and patents must be registered before they can enjoy protection.
  3. Trademarks and patents are territorial rights and so must be registered in each country where they will be used. A trade secret is not limited by territories and guarantees protection anywhere it is used.
  4. A trade secret is more difficult to enforce than a patent or trademark.
  5. The moment a trade secret is made public, anyone may have access to it and use it at will. Patents and trademarks do not face the same disadvantage as they ought to be disclosed to the public.
  6. A trade secret may be registered as a patent by someone else who has access to similar information.
  7. Trademarks protects the mark that is used to identify a product. Patents protect the invention. Trade secrets protect the confidential information.

I hope this has been enlightening.


[1] Pepsi Alerted Coca-Cola to Stolen-Coke-Secrets Offer (Fox News July 06, 2006) (


[3] McDonald's secret Big Mac sauce recipe allegedly leaked online

[4] Hanson, by Mark J.; Thompson, Joe R.; Dahlgren, Joel J. "Overview of Confidentiality Agreements". Iowa State University Extension and Outreach.

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.

In association with
Practice Guides
by Mondaq Advice Centres
Relevancy Powered by MondaqAI
Related Topics
Related Articles
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