Have you ever wondered what makes your Coke and KFC wings taste so marvelous? While many do wonder, the true recipes have never been revealed. The Coca Cola formula and KFC recipe are two of the most valuable, closely-guarded trade secrets around. However, you don’t have to be a gigantic corporation to have a valuable trade secret. Your customer lists, formulas, or perhaps even method of operation could constitute a trade secret that needs tight security. This type of intellectual property (IP) only holds value if kept confidential. How, then, can you protect this highly-valuable information? Read on for helpful tips.
- Identify and Conspicuously Label Trade Secrets
It is imperative that you audit your company’s IP at regular intervals. By taking the step to identify and inventory your trade secrets you’ll be able to best protect them. You should ask yourself: what valuable and secretive information does my company rely on? What about this piece of information gives my company a competitive edge?
Trade secrets may include a variety of information, including data, methods, formulas, software, customer lists, product plans, supplier lists, and other confidential information. Once you identify them, properly label all physical and electronic versions with “Confidential”. Noting that disclosure is prohibited will help protect you not only legally but also organizationally. During the inventory process, evaluate who currently has access to your trade secrets. Trade secrets should be available on a strict need-to-know basis. Consider reevaluating which employees, clients, and third parties make the cut.
- Use Non-Disclosure Agreements
Case history shows that judges love non-disclosure agreements. By utilizing non-disclosure and confidentiality agreements, you demonstrate effort to protect your company’s trade secrets, which proves to be a great defense in court.
Foremost and more importantly though, a non-disclosure agreement serves as a great preventative measure. When creating these agreements, be sure that your policies are reasonable and enforceable. For example, when the PatientPoint health information service brought a legal action to prevent a terminated employee from using competitive trade secrets, the court found that PatientPoint had not asked for a non-disclosure agreement until a year after the employee began work. Furthermore, it took PatientPoint six months to ask the terminated employee to return his company-issued laptop and other confidential information. If you’re unsure about the practicality of your non-disclosure agreements, seek help from an employment attorney. Utilizing counsel is exceptionally useful; non-competition laws constantly evolve so your agreements with your employees and third parties should too. Employment lawyers can assist you in updating your agreements routinely, which is particularly important for employees or those with access to your most valued secrets.