You must first realize that your trade secrets are probably very valuable. Then, you must identify them and take reasonable precautions to guard their secrecy.
Failure to identify and protect trade secrets can be a costly mistake, so procedures designed for their protection should be initiated as early as possible.
If you fail to do so, you could find yourself in the unenviable position of trying to regain control of a valuable asset that has been lost to a competitor because it was inadequately protected.
A general knowledge of trade secret law is advisable. You may want to review the Uniform Trade Secrets Act, remembering that while every state recognizes some form of trade secret protection, and their trade secret laws are similar, state laws do vary.
Generally speaking, you are required to take reasonable steps to safeguard the secrecy of your trade secrets. Following are some of the things that should be implemented early on, before the information gets out.
Steps to protecting your trade secrets
* The first thing you must do to protect the trade secrets of your business is to identify them. Do I Have Trade Secrets To Protect? should help if you have questions about what trade secrets your business may have.
* A written document outlining your company’s policy regarding trade secret protection will emphasize your commitment to keeping such information confidential and guide both employees and contractors in identifying and protecting your trade secrets. Such a document will also be an asset should you become a party in litigation.
* Mark any confidential material with a warning label indicating it is a confidential trade secret, the trade secret’s owner, and that disclosure is prohibited.
* Isolate important trade secrets in a separate and secure location, controlled by a small number of employees who have restricted access to such information in accordance with company policy.
* Access to computer files containing trade secrets should also be controlled and limited to those who “need to know”. Password protection is the most common method.
* Limit access to your company’s trade secrets to as small a number of people as possible, making sure those to whom sensitive information is disclosed have a legitimate “need to know”.
* Monitor the copying and/or removal of confidential documents or data.
* Be careful not to reveal confidential information during sales presentations or when interviewing prospective employees and contractors.
* Be particularly aware of what visitors may hear or see when touring your business facility.
* Be cautious when dealing with third parties and always require signed confidentiality agreements before revealing any of your company’s trade secrets.
* Careless employees who inadvertently reveal trade secrets and dishonest employees who do so for personal gain may represent the greatest danger to your trade secrets. It is therefore extremely important to go over your company’s trade secret protection policy with employees before they are hired, from time to time while they are employed and again when their employment ends. Remind them of their obligation and commitment to keep all of the company’s trade secrets confidential and point out the possible consequences if they don’t.
* Get signed confidentiality agreements from all employees whose work will require them to have access to your trade secrets.
What could be more important than a competitive advantage maintained by keeping your company’s trade secrets safely out of your competitors’ hands?