Trade Secrets 2025

AUSTRALIA Law and Practice Contributed by: John Lee, Michael Williams, Siabon Seet and Vanessa Farago-Diener, Gilbert + Tobin

3. Preventing Trade Secret Misappropriation 3.1 Best Practices for Safeguarding Trade Secrets As protection of trade secrets in Australia relies principally on contractual and equitable obliga - tions, the following contractual tools are recog - nised as important in safeguarding a business’ confidential information and trade secrets across all industries. • Use of non-disclosure agreements prior to disclosing confidential information and trade secrets. • Use of confidentiality clauses in both employ - ment and business contracts. • Non-compete clauses in employment con - tracts to limit former employees from engag - ing in competitive activities. • Exclusivity clauses in business contracts to restrict the sharing of information. In addition to contractual tools, other best prac - tices commonly used in Australia to safeguard a business’ confidential information and trade secrets include the following. • Locking down a business’ IP and confidential information and limiting access to “need to know” basis. • Restricting physical access to specific loca - tions such as laboratories. • Restricting access to online systems, such as files, to only those employees working on specific projects. • Undertaking a review of an employee’s recent data history and IT access upon resignation. 3.2 Exit Interviews Exit interviews will be dependent on the employ - er and will vary across Australia. Typically, an exit

interview will include questions as to the nature of the employee’s new position and the com - pany the employee is moving to so as to deter - mine whether any non-compete restrictions in the employment contract apply. It is not typically the case that an employer in Australia will require a departing employee to provide written assurance in relation to confi - dential information and trade secrets. However, employers typically provide an exit letter remind - ing the departing employee of their ongoing obli - gations regarding non-disclosure of confidential information and trade secrets. 4. Safeguarding Against Allegations of Trade Secret Misappropriation 4.1 Pre-Existing Skills and Expertise It is accepted by Australian courts that employ - ees will have a bank of general knowledge and skills relevant to their field of expertise. Employment contracts which attempt to pro - hibit former employees from using their general knowledge and skills for subsequent employers have been held to be unenforceable. Similarly, long non-compete provisions in employment contracts are also commonly held to be unen - forceable in Australia. While Australia does not recognise the US doc - trine of “inevitable disclosure” , Australian courts can consider as part of their equitable jurisdic - tion whether to impose a non-compete term for a former employee in circumstances where there is no express non-compete in the employment contract and the new employer’s work substan - tially overlaps with the former employer’s work

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