Protecting your company’s trade secrets is key to building and maintaining a competitive advantage.
The first step in doing so is to identify the information you need to protect. A trade secret can be anything that has current or potential economic value for your company and is not generally known. Here are just a few examples of information that could be a trade secret:
- A formula
- Software code
- An engineering drawing
- Product specifications
- A manufacturing technique
- Internal marketing information
- A list of customers
- Price lists
Identifying valuable information that is not generally known is key, because you can’t protect what you can’t identify.
Protecting Your Company’s Secrets
Once you have identified your company’s trade secrets, the next step to protect that information. This means more than putting a password on a file or deciding who should or should not know the information. You have to take reasonable efforts to maintain the secrecy of that information. Once your information falls into the public domain, it is no longer a trade secret and you will not have legal recourse if another company uses it.
Here are some of the ways your company can lose protection of a trade secret:
- Publishing a paper in a trade magazine or scientific journal about your trade secret
- Sharing the information with a potential partner or investor without a nondisclosure agreement
- Sharing the information with an employee without a nondisclosure agreement
- Failing to mark confidential information as confidential
- Disclosing too many details about your trade secret to customers or sales employees
- Failing to train employees about what trade secrets are and how to protect them
- Allowing employees to keep trade secrets on an unprotected laptop or cellphone
There is no simple guide for protecting trade secrets. It is a process and a culture that you need to instill within your enterprise. Consulting with an experienced intellectual property attorney is a good first step.