A trade secret is confidential information that is legally protected, used in a business, and gives your company a competitive edge. The most famous examples include the formula for Coca-Cola, Google’s search algorithm, and the New York Times’ system for determining what books land on its bestseller list. And owning trade secrets is not limited to large corporations. Small businesses have trade secrets, too, and keeping them out of the hands of others is sometimes more of an art than a science. There are certain basic steps, however, that should be taken by every company wishing to protect its trade secrets:
- Develop a List: The first step is knowing what you have. Look across your business and think about any types of information you possess that are both confidential and critical to your success. Trade secrets could be product designs, customer lists, marketing plans, sales forecasts, or processes. For software developers, proprietary code obviously needs protection, and for restaurants and food stores, it’s the secret recipe. Conduct a “trademark audit” to identify the information you have a legal right to keep private.
- Treat Trade Secrets like Secrets: Stamp or watermark “confidential” on sensitive documents, and obtain confidentiality and non-disclosure agreements from employees, contractors, and vendors. These actions put people on notice not to appropriate your trade secrets for their own use and lay the foundation for you to take legal action if necessary. Digital files should be encrypted and password protected, hard copies of files should be kept behind actual locks, and rules for access should be established and followed.
- Train: Disclosures of trade secrets can happen inadvertently, but the negative impact on your business can happen regardless of intent. Develop solid and required training on what your company considers confidential and the obligations of protecting the same. Enact strong, written policies, and when an employee leaves, shut down their access to files and systems right away so that your secrets don’t leave with them.
Whatever your trade secrets are, they may not be a secret for long unless carefully protected. The attorneys at Wright Beamer can help you develop strategies to protect your trade secrets and your business. Contact us at (248) 477-6300 or firstname.lastname@example.org.