How do you protect trade secrets?

trade secrets

How do you protect trade secrets?

A trade secret can be the key to a company’s success and their continued success may depend on keeping that secret safe and out of the hands of rivals.

Trade secrets are an intangible asset that is protected by law in the US. However, the business and each of its employees must also contribute.

The Uniform Trade Secrets Act, which provides trade secret protections, has been enacted in some form by the majority of US states. A broad definition of a trade secret would be “a piece of information that has independent economic value by not being commonly known and can fairly be maintained a secret,” though the legal meaning can vary from state to state. As the definition implies, a company is required to take reasonable measures to protect the confidentiality of their trade secrets.

Here are a few key ways for a company to protect trade secrets –

  1. Determine what needs to be protected
  2. Create a mechanism for detecting newly developed content that requires confidentiality and identify each piece of information that you need to protect. Avoid being overly comprehensive when choosing since this could diminish the protection of trade secrets.

  3. Mark documents with sensitive information
  4. Documents that include or reflect information that is a trade secret should be marked as confidential. Limit the amount of copies and circulation of these documents, number copies as needed, and mandate check-in and check-out for all copies.

  5. Maintain a close eye on where information is kept.
  6. To find out who has access to important information and where it is kept, conduct an information audit. Include all physical copies, computers (desktop and portable), and diskettes. Search for any potential weak points.

  7. Protect devices
  8. Passwords should be required to access computers that contain sensitive data.

  9. Enforce confidentiality with outside vendors
  10. Include a confidentiality clause regarding the trade secrets in any agreements you enter into with third parties. Try to select various vendors for different parts when outsourcing the production of any of your products. Don’t reveal the outcome or the connections between the components.

  11. Provide Sufficient Security
  12. A secured filing cabinet will do as security for a tiny company. Larger businesses may require security guards, secure areas, and badges.

  13. Limit Public Access to the Company
  14. Limit public tours and require all guests to sign in.

  15. Exercise Caution Overseas
  16. Recognize that not all nations adhere to American policies safeguarding trade secrets. Be extremely cautious about who you share information with if you are conducting business internationally.

  17. Implement employee policies and training
  18. All personnel who will be handling trade secrets must undergo training, sign a non-disclosure agreement, and abide by corporate guidelines for handling and protecting them. Inform employees if information is handled improperly and, if necessary, take disciplinary action. Employers should conduct exit audits with departing employees to require them to surrender any trade secrets and to remind them of their non-disclosure agreements.