Trade secrets can be vital to the success of any business, not just large corporations. Unfortunately, many business owners do not take proper steps to protect this valuable intellectual property. In fact, they may not even realize it should be protected.
A wide range of intangible assets can be considered trade secrets, from recipes or formulas for company products to methods of operation to customer and price lists. If you haven’t already, your company can take several practical steps to safeguard these assets.
A blog post by the U.S. Small Business Administration offers 5 steps for protecting your trade secrets. These tips include the following:
- Identify your company’s trade secrets – Think about your operations and what information would compromise that if it got into a competitor’s hands. Create a list of your company’s trade secrets. Be selective in what information you chose, so you don’t trivialize the protection of valuable information.
- Keep trade secrets confidential – Label trade secrets as “confidential” and keep them in a secure place. Store hard copy information in a locked and secure area. Limit access to electronic files and make sure it is password protected.
- Educate employees about information protection – Have employees sign a nondisclosure agreement and a company policy regarding protection and proper handling of trade secret materials. Provide refresher classes on company policy and the need for confidentiality.
- Understand the law – Historically, trade secrets have not required a national or international registration. State laws typically govern these matters according to the Uniform Trade Secrets Act. Beginning in 2017, however, the Defend Trade Secrets Act of 2016 will add additional legal protection at the federal level.
- Take action against trade secret violations – If you discover a competitor is using your trade secrets, act quickly through a letter requesting the competitor “cease and desist” their actions. If trade secrets were obtained through improper means, or misappropriation, you may be entitled to injunctive relief and damages. Contact an experienced intellectual property attorney advocate for your rights throughout the process.