In a constantly evolving society, trade secrets are increasingly harder to protect. Businesses rely on trade secrets for maintaining a competitive edge in their industries. However, advancements in digital technology put intellectual property at risk. Trade secret litigation is on the rise, and unfortunately, oftentimes legal action is not quick enough. The result may be disastrous for companies.
Trade secret misappropriation
It’s important to utilize trademarks, patents and copyrights when protecting intellectual property. Protecting trade secrets, on the other hand, comes down to actively practicing risk management. Ironically, the hardest part about protecting a trade secret is keeping it a secret. About 80 percent of trade secret thefts involve employees and customers, both past and present. Since the root of the problem is usually close to home, early preventive measures are paramount.
Federal courts are now available for trade secret misappropriation, which essentially involves the improper use of a business’s information. State laws govern these claims, and the rules are oftentimes modified. Your business is in the forefront when it comes to protection. Listed below are a few ways to be proactive.
- Identify and define your trade secrets. Trade secrets have three characteristics: It is a secret, it gives the owner a competitive advantage and measures are taken to ensure it stays a secret. A trade secret can take many forms, so you should create a list that clarifies the valued information.
- Develop employment policies and contracts. After defining and solidifying the trade secrets, businesses should establish contracts for all employees and contractors. These contracts may include non-solicitation agreements, confidentiality agreements and covenants not to compete.
- Keep them under lock and key. In a perfect world, employees would sign the contracts and the problem would dissipate. But in reality, businesses need to take extra measures to ensure secrecy. If trade secrets are jotted out with pen and paper, be sure to mark those documents as “confidential” and lock them up. Trade secrets in the form of electronic files should have limited access and cyber protection.
- Educate employees about protection. The owner of a trade secret has the responsibility to make that known to their employees. Even if someone signs a contract, they might not fully understand the weight of the confidential information. Also inform employees about the legal consequences of disclosing the company’s trade secrets. You can further enforce this process by creating employment manuals that amplify rules.
The misappropriation of intellectual property can seriously damage a company. Some businesses never fully recover from important information going public. Creating a security plan is an essential first step for safeguarding trade secrets. A skilled intellectual property lawyers can help with forming agreements and policies that lower risk of a breach.