Overlapping Concepts in Proprietary, Confidential, and Trade Secret

Today's contract tip covers the overlap of the terms proprietary, confidential, and trade secret.

Proprietary and confidential do not have an accepted legal meaning other than the plain English definitions. Proprietary means something owned. Confidential means something secret.

In contrast,"trade secret" is a statutory term. The exact definition depends on which statute applies but typically is defined as information that (1) is not generally known to the public, (2) has economic value because it is not known, and (3) the owner takes reasonable steps to keep the secret.

Looking at how they overlap helps me keep these terms clear.

Trade secrets are by definition both proprietary (you own rights in your trade secrets) and confidential (it isn't a trade secret if it is generally known).

Proprietary information includes some trade secrets (such as a secret recipe), but also other information that is neither confidential nor a trade secret (my website design).

Confidential information includes trade secrets and information that does not meet the definition of a trade secret. Some confidential information may be proprietary (the secret recipe) but other types may not be (there's a surprise party next week).

Take care to be precise in your usage of these terms.

Don't refer to trade secrets when you mean confidential information.

And please do not use confidential and proprietary as synonyms. They are not, and treating them that way results in confusing and nonsensical contract language.

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Here's a link to the original LinkedIn post and the updated LinkedIn post to add the cartoon.