When a new and creative idea comes to a person’s mind, their excitement is often so great that the first thing they think about is sharing it with the whole world. However, immediately afterwards, another thought comes to mind: “What if I share it and someone steals my idea? What happens then?”

This is when questions and concerns begin to arise: Should they obtain a patent in order to be protected for a number of years, although the protection has an expiry date, or should they keep the idea as a trade secret, never disclose it to anyone, and maintain its protection indefinitely?

Nowadays, we all know that maintaining a business’s success and position in the market is quite challenging. Good and creative ideas can now be copied very easily. Therefore, every business needs to protect not only its ideas, but also the information related to it. One way to protect the information concerning the creation and development of an idea and maintain an advantage over competitors is to keep it as a trade secret.

Today, a trade secret constitutes one of the most important assets for the growth and development of a business, provided that the business takes the necessary measures to protect it, such as:

• Keeping it confidential;
• Ensuring that it has acquired commercial value;
• Protecting it through Confidentiality Agreements; and
• Restricting access by third parties to the relevant files and information concerning it.

There are several well-known examples of trade secrets belonging to major companies, which have contributed to their success for many years:

The Coca-Cola formula: The famous Coca-Cola formula is one of the best-known and most enduring secrets in the world and has remained protected for many decades. The company states that the original written formula is kept in a vault at the World of Coca-Cola in Atlanta, USA, while the exact recipe remains secret.

Chartreuse green liqueur: The green Chartreuse liqueur is protected through the confidentiality of information concerning its ingredients. The entire recipe and production process are known only to two Carthusian monks at the Grande Chartreuse monastery in the French Alps.

Google’s search algorithm: The protection of Google’s search algorithm is one of the most important elements of the company’s technology and of the company itself. By keeping it as a trade secret and continuously updating it, much of the information concerning the way it operates remains confidential. In this way, Google secures a very strong position in the global market and protects an important part of its know-how.

Renaissance Technologies’ “Medallion” Fund: A highly sophisticated software system, or algorithm — otherwise known as a trading robot — operates autonomously on powerful computers and generates billions through rapid stock-market transactions, while keeping its code as one of the world’s most valuable trade secrets. The way it operates constitutes strictly-protected business information.

Fast Fashion (Zara): Zara uses proprietary software that immediately connects sales with its factories, allowing the company to respond quickly to market trends and keep this system as its own trade secret of success.

KFC: KFC’s famous recipe containing 11 herbs and spices is one of the best-known trade secrets in the food industry. The exact composition of the recipe has remained confidential for decades.

WD-40: The exact formula of WD-40 is a trade secret of the company and has remained protected for more than 70 years. The company has chosen to keep its composition secret rather than disclose it publicly.

What connects all of the above examples is that these businesses keep important information, recipes or methods of operation secret because they have contributed to their success. In this way, they maintain the protection and success of their businesses, protect important elements of their business activities and, at the same time, maintain their competitive advantage.

In Cyprus, the protection of trade secrets is governed by Law 164(I)/2020, which harmonises Cypriot legislation with Directive (EU) 2016/943. The legislation enables a business to seek the issuance of immediate court orders aimed at ceasing the unlawful use or disclosure of its trade secret. At the same time, the business is entitled to claim monetary compensation for the loss it has suffered, including the profits it has lost as a result of the violation of Law 164(I)/2020.

Cypriot case law has also considered the distinction between trade secrets and confidential information.

In George Pamboridis LLC v. L. Protopapa & Co LLC and Electra Papadopoulou, Application No. 15/2024, dated 3 April 2025, the Supreme Court examined the distinction between “trade secrets” and “confidential information”, noting that, as a general rule, the protection afforded to trade secrets is not subject to a time limitation, unlike the protection afforded to confidential information. The relevant passage from the judgment is as follows:

“The distinction between the two aforementioned categories of information lies in the fact that, as a general rule, the protection of trade secrets is not subject to a time limitation, unlike confidential information.”

Furthermore, the Court referred to the decision in Lansing Linde Ltd v Kerr (1991) 1 All ER 418, 425–426, which had been relied upon by the Court of Appeal, and made the following observations regarding the concept of a trade secret:

“It appears to me that the problem is one of definition: what are trade secrets, and how do they differ (if at all) from confidential information? Mr Poulton suggested that a trade secret is information which, if disclosed to a competitor, would be liable to cause real (or significant) harm to the owner of the secret. I would add first, that it must be information used in a trade or business, and secondly that the owner must limit the dissemination of it or at least not encourage or permit widespread publication.”

It follows from the above that, in order for information to qualify as a trade secret, it must be used in the course of business activities and its disclosure must be kept confidential by its owner.

In certain circumstances, information relating to the business’s customers and the products they purchase may also be considered trade secrets.

Furthermore, case law recognises that confidential information may also be protected, even where such information does not constitute a trade secret.

The protection of a trade secret is not a matter of luck, but rather of proper organisation and care. To ensure that your own business idea, formula or algorithm does not fall into the hands of competitors, it is important to obtain appropriate legal guidance.

With the appropriate legal protection, a business can take the necessary measures and enter into Confidentiality Agreements, enabling it to safeguard all of its important information and maintain its competitive advantage. In this way, it can strengthen and ensure its protection at every stage of its operation and development.

The content of this article is valid as at the date of its first publication. It is intended to provide a general guide to the subject matter and does not constitute legal advice. We recommend that you seek professional advice on your specific matter before acting on any information provided. For further information or advice, please contact the IP Department, Nicosia office, tel +357 22447777 or email koulla.christodoulou@kyprianou.com