Protecting Your Trade Secrets

Trade secrets are invaluable assets that give your company a competitive edge. Safeguarding them is paramount to your business’s success and longevity.

So, how should a company protect its trade secrets?

1. Identify Your Trade Secrets:

Before you can protect them, you need to clearly identify what your trade secrets are. This can range from manufacturing processes to customer lists and data, or unique business strategies. It’s imperative that you take the time to do so.

2. Limit Access:

Not everyone in your company needs to know all your secrets. Grant access only to those who truly need it for their roles. This minimizes the risk of accidental or intentional leaks. If non-essential personnel have access to your trade secrets, it can work against you legally if a breach occurs.

3. Use Non-disclosure Agreements (NDAs):

Anytime someone outside your company might be exposed to your trade secrets (e.g., consultants, vendors, contractors), have them sign an NDA. This legally binds them to confidentiality. But make sure your NDAs are drafted properly to maximize your protection. A weak or poorly drafted NDA can hurt you and affect your rights if litigation ever becomes necessary.

4. Implement Physical Security Measures:

Secure areas where sensitive information is held and only allow authorized personnel into them. This might involve locks, security personnel, surveillance cameras, or secured storage facilities.

5. Digital Protections:

Utilize strong password protocols, encrypted storage solutions, and firewalls. Regularly audit, update, and patch software to thwart cyber threats. It’s an ongoing battle!

6. Conduct Regular Training:

Educate your employees about what the company’s trade secrets are, the importance of protecting them, and how to do so. Ensure they are complying with the company’s trade secret policies. And make sure that they understand the serious consequences of leaks and misappropriation, both for the company and for them personally. Some employees believe that if a company’s trade secrets can be reduced to a few computer files, it’s not actual property like a company computer or car and doesn’t have to be treated with the same level of caution or care. You need to correct this mistaken impression.

7. Monitor Departing Employees:

When an employee leaves, especially if they had access to trade secrets, conduct exit interviews and remind them of their legal obligations to maintain confidentiality. Also, promptly revoke their access to company systems and retrieve all company-owned devices. It may also be prudent at times to review and monitor their prior outgoing company e-mails and computer activity to ensure they didn’t disclose any trade secrets. It’s not uncommon for departing employees to attach company files to e-mails or download data and take it with them, especially if they’re going to a competitor or starting their own business.

8. Be Cautious with Outsiders:

Limit what vendors, partners, or potential investors can see until it has been determined that they have demonstrated a genuine need to know and have agreed to protect your information. Conduct some due diligence or background checks beforehand when necessary to determine if any of these parties have been involved in past incidents or have red flags in their background which might compromise their trustworthiness if they’re exposed to your trade secrets. When in doubt, use a different third party if possible and don’t disclose.

9. Regularly Review and Update Policies:

The business world is always evolving. Regularly review and adjust your trade secret protection strategies to address new challenges. And as your business changes and grows, it may generate other valuable information which could qualify as new trade secrets worthy of protection as well.

10. Act Swiftly Against Breaches:

If you suspect your trade secrets have been compromised, act quickly. Consult legal counsel, investigate the breach, and if necessary, pursue legal action to mitigate damage. If you delay taking appropriate action, it could affect your legal rights and your trade secrets can be lost forever—and free for your competitors to use and profit from.

Takeaway:

Protecting trade secrets is not a one-time action but an ongoing commitment. With diligence, clear protocols, and a company culture that values confidentiality, your trade secrets can remain your unique assets, propelling your business forward.

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