The Importance of Trade Secret Protection
Don't let the cat out of the bag! Learn about trade secret protection and how to keep that bag tightly shut.
Author: DBS BusinessClass, Administrator of DBS
When it comes to protecting intellectual property, companies often choose patents, trademarks or copyright laws. Today, however, the most popular method of protecting IP is through secrecy.
A trade secret is confidential information that provides a business with a competitive edge and is not known to the general public. These can be family recipes, an algorithm or even a sales strategy. Unlike a patent, trade secrets do not need to be publicly registered and information is protected for an indefinitely amount of time.
Trade secret laws, however, cannot be as strongly enforced as other IP law, and will not protect you from persons who reverse-engineer your product or service to discover your secret. With the real risks cyber-espionage in the digital age, proper care to protect confidential information.
1. Educate your employees on the importance of trade secret protection
Take time to explain to your employees about how crucial it is to protect ‘confidential' information, and what they should do about it. Documents and emails should be marked appropriately with ‘private and confidential' or ‘do not make copies'. Remind them not to discuss this information in public spaces or open areas and manage access. If a trade secret is publicly disclosed, it no longer falls under the protection of trade secret law.
2. Have good IT security infrastructure in place
Password, encryption, and access controls should be instituted. Confidential information should be password-protected, and employees should be reminded not to share their login information. Ensure that only employees on a ‘need-to-know' basis have access to the database, and regular security audits should be conducted to ensure the integrity of the system.
3. Ensure that external parties sign Non-Disclosure Agreements
External vendors, consultants and in future, franchisees, should sign confidentiality agreements, especially if they come in contact with the relevant departments with access to the secret. Employees that leave the company should also be made to sign agreements that ensure that they are legally bound not to share these secrets with another organisation when they leave (usually for a limited term).
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