Have your friends or colleagues ever teased you about your mom’s recipe having a secret ingredient? Generally, this looks like a simple compliment. However, in the context of Intellectual Property (IP), it summarises one of the aspects of intellectual property rights, i.e., Trade secrets. For instance, the secret formula of the Coca-Cola soft drink is protected as a Trade Secret, and the brand name ‘Coca-Cola’ is protected as another IP known as a Trademark. This blog will help guide one through the maze of differences between trademarks and trade secrets. 

Introduction

Instead of diving straight into the differences, one must know what intellectual property (IP) is. Intellectual Property is any intangible thing that originates from the intellect of a human. Moreover, the exclusive rights granted to the owner or creator over these properties are known as intellectual property rights. There are various types of IP, such as trademark, copyright, patent, industrial designs, trade secret, etc. But in this blog, only two of them are explained: trademarks and trade secrets. 

A trademark is a distinct mark to help identify the goods and services of one brand from those of another. The mark can be a brand name, logo, shape, combination of colours, signature, symbol, slogan, label, or even a combination of these. Examples include the “G” logo of Google, the “swoosh” symbol of Nike, the “panther” symbol of Puma, etc. The purpose of the trade mark is identification, meaning to distinguish your brand from that of others in the eyes of the consumer. 

WIPO has defined trade secrets as the “Intellectual property rights on confidential information which may be sold or licensed”. It is a crucial piece of information that is only known to a few people, is commercially valuable, and is actively hidden from the public. Examples include the secret formula of Coca-Cola, KFC recipe, the NY Times Best Seller list, etc. The purpose of a trade secret is to prevent confidential information of a company from being released in the market, as it provides a competitive edge over other market competitors. 

Legal Framework

In India, the Trade Marks Act, 1999 is the primary statute that governs the trade mark law, including its registration, cancellation, renewal, assignment, etc.  A “trade mark” is defined under Section 2 (1)(zb) of this Act as: “(zb) trade mark means a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging and combination of colours;”

The registration of a trademark is compulsory for it to be protected against infringement. However, unregistered trademarks are also protected, at least against passing off. The term of protection of registered marks is 10 years, subject to renewal. 

Unlike the US’s DTSA, 2016 and the EU’s Directive on the Protection of Trade Secrets (2016/943/EU), India does not have dedicated legislation for protecting trade secrets. However, in the case of Ambiance India Private Limited v Shri Naveen Jain 122 (2005) D.L.T. 421, the Delhi HC defined trade secret as information that “can be a formula, technical know-how or a peculiar mode or method of business which is unknown to others.”

Moreover, the trade secrets are protected by the Indian Contract Act, 1872, common law, and principles of equity. The most common way to protect a trade secret is to insert a “confidentiality clause” in the employment contract. This clause protects every confidential information of the company not only for the period of employment but also after that, sometimes, for a certain period. However, these laws are not enough. It is high time that India adopts a sui generis law to protect trade secrets, aligning with Article 10 bis of the Paris Convention and Article 39(2) and 39(3) of the TRIPS Agreement. 

Comparative Analysis: Trademark vs Trade Secret

Now that we know the meaning of trademark & trade secrets and what they aim to protect, it is time we understand the differences between the two. 

S. No.	Basis	Trademark	Trade Secret
1.	Nature	It provides the brand a unique identity and acts as its identifier.	It protects and prevents confidential information from being released to the public.
2.	Purpose	To distinguish the goods or services of one brand from another, and branding.	To provide a competitive edge over the others.
3.	Statute	Trade Marks Act, 1999.	No sui generis law.
4.	Protection Mechanism	Statutory registration or through the common law remedy of passing-off.	Indian Contract Act, 1872, Non-disclosure Agreements (NDA) or Common law.
5.	Offenses	Infringement in case of registered trademarks and passing-off in case of unregistered trademarks.	Misappropriation, breach of contract, breach of confidence, etc.
6.	Protection period	10 years, but can be renewed indefinitely.	Period mentioned in the contract or as long as the secrecy is maintained.

When to choose which: Trademark or Trade secret?

The choice between the trademark and trade secret depends on the purpose of the individual or the business looking to protect its IP. If you are a startup company looking to promote your brand, then you must register your brand name/logo as a trademark. But if you are a company with a new, unique procedure for client management, unknown to others, you must protect it as a trade secret. 

Now, you must be thinking, can they be chosen together? The answer to that is yes. Both trademark and trade secret can be used simultaneously to protect different aspects of the same product. Businesses often use different types of IPs, like trademarks, trade secrets, etc., to strengthen their IP portfolio. For instance, trademarks are used to protect the brand name and logo of KFC, which are recognised by customers as indicators of fast food associated with the brand. Simultaneously, the secret recipe of KFC is kept undisclosed to customers and is protected as a trade secret, thereby granting a competitive edge to the brand.

Conclusion

To summarise, a trademark is a unique identification used to publicise a brand, and on the contrary, the complete essence of the trade secret is based on the secrecy of the confidential information. Prima facie, the concept of trademark and trade secret is contrary, nonetheless, they can be complementary to each other and protect different features of the same product at the same time.

The best way to determine which of the two is needed by a business is to first question the purpose, as explained earlier. Each type of IP serves a different goal. That goal must be clearly identified. Vigilance should also be maintained by all individuals and businesses. IP portfolios must be regularly and thoroughly evaluated. This ensures that rights are not left vulnerable to infringement.

If someone is still unsure about which IP to choose, consulting an IP professional is strongly recommended. Sometimes, a single secret recipe or a brand logo can make the difference between success and failure.

References

1. Trade Secrets, available at: https://www.wipo.int/en/web/trade-secrets (Last visited April 17, 2025)
2. Vernita Jain, “Laws for the Protection of Trade Secrets in India,” available at: https://blog.ipleaders.in/laws-protection-trade-secrets-india/ (Last visited April 17, 2025)
3. Jyoti Naagar, “Key Differences between Trademark and Trade Secret,” available at: https://www.rajstartup.com/blog/difference-between-trademark-and-trade-secret (Last visited April 18, 2025)
4. Yash Khurmi, “Difference between Trademark and Trade Secret,” available at: https://e-startupindia.com/learn/difference-between-trademark-and-trade-secret/ (Last visited April 18, 2025)
5. The Trade Marks Act, 1999 (Act 47 of 1999)
6. Aaron Hall, “Exploring Trade Secret Protection in Different Jurisdictions,” available at: Exploring Trade Secret Protection in Different Jurisdictions – Attorney Aaron Hall (Last Visited April 18, 2025)
7. Aaron Thomas, “Trade Secrets in IPR,” available at: https://blog.ipleaders.in/trade-secrets-in-ipr/ (Last visited April 18, 2025)