Trade secrets are invaluable to a business, but once they lose their protection, they cease being secrets. Moreover, placed in the wrong hands, they can serve as the fuel your competition needs to succeed. What are Trade Secrets? They include customer lists and related data; computer programs; strategic plans; research and development information; financial data, including cost pricing and cost date; and much more. Simply put, it’s the information that typically cost a great deal to compile and provides your business with a strategic edge.
How to Protect Trade Secrets? It’s nearly impossible if the information is shared and stored through regular email channels. This information should be under lock and key, and only accessible to selected people, who must sign in/out to view it. To be sure that all relevant documents and data is included, there should also be a process to mark information as Trade Secrets to make sure it is added to the existing documents, and is maintained in a locked cabinet that is off-limits to visitors and other personnel who have no reason to access the information. If the trade secrets are stored in a secured computer network, special efforts should be taken to create the necessary firewalls, intrusion detection, encryption devices, and other electronic measures. If the information is no longer a trade secret, be sure to shred the documents before disposing of them.
Trade Secret security should also be imposed within nondisclosure agreements – particularly for employees who may take their knowledge of these trade secrets to their next employer or their own start-up. The trade secret provision within the nondisclosure agreement should be executed at the same time as the employment starts. This will help provide evidence that the employee agreed to be bound to said secrecy as part of the employment agreement…and not something that came as a result of continued employment.