Trade Secrets Law
Trade secrets consist of any formula, pattern, device or compilation of information used in a business that gives the business an opportunity to obtain an advantage over competitors. Simply put, a trade secret might be anything a business would not want a competitor to know. Customer lists, supplier lists, business plans, methods of doing business, secret formulas, or proprietary databases could constitute trade secrets.
A business, as an owner of trade secrets, must take affirmative measures to safeguard its proprietary information. If a dispute were to arise over a business’ trade secrets, a court would critically analyze the efforts the business took to protect its trade secrets. Such efforts could include the following:
- Non-compete agreements. These agreements prevent an employee from competing against the company after employment ends. These agreements are typically limited to a geographic area and a limited period of time.
- Written trade secrets policies. The policies should generally outline the nature of your business’ trade secrets and stress the company’s policies for maintaining confidentiality.
- Restrict access to trade secrets. If possible, the business should physically segregate trade secrets from other information and restrict access to the former.
- Maintain physical security of the business’ facilities. The business should institute security measures, including the use of locks on desks, cabinets and rooms that house trade secrets. The business should employ special security measures to restrict access to trade secret information stored on computer systems.
- Label trade secret documents. Documents containing trade secrets are of particular concern, because they can be easily removed or secretly photocopied. A business should clearly label trade secret documents with a confidentiality notice and instruct all employees as to the meaning of the designation. When such documents are no longer necessary, they should be shredded.
- Limit the public’s accessibility to trade secrets. A company should exclude the public from those areas in which trade secrets are located.
- Screen speeches and publications. It is not uncommon for businesses to disclose trade secrets at trade shows, in magazine articles, publications or press releases and during public speeches. A business should screen all publications, articles, and speeches prior to dissemination.
- Use non-disclosure agreements when dealing with third parties. Situations will arise in which a business will find it necessary to disclose trade secrets to prospective buyers, licensees, joint venturers or other third-parties. All third-parties should sign a written confidentiality agreement before any trade secrets are revealed.