Methods to Protect Trade Secrets
Because trade secrets do not involve filing any documents with any governmental agency, there are no time requirements to create trade secret rights. Further, trade secret rights can exist indefinitely, as long as the information is kept secret. However, there is timing involved in the procedures which should be in place to ensure secrecy. First, among these are employee entrance and exit interviews, followed by obtaining signed confidentiality agreements from third parties prior to disclosure of sensitive information.
Creating and preserving trade secrets requires no legal fees. The only costs involved are the costs for the security steps required to keep the information secret. However, businesses must remain vigilant that the minimal legal requirements for obtaining trade secret rights do not result in minimal security measures safeguarding the information.
Much more significant are the legal fees that companies expend to enforce trade secret rights once the secret has been misappropriated. In most trade secret disputes we have been involved in, the misappropriation seems to occur more due to poor communication and lax security measures than due to malicious intent. The key is to make sure the importance of maintaining confidentiality is stressed to all the individuals who come to know the secret information.
Below are reasonable measures required to protect your Trade Secrets- depending on how your business operates:
Use good passwords
Placing appropriate confidentiality blocks on documents
Clean desk policies
Employee badge policies
Confidentiality or non-disclosure agreements with third parties
Lock premises and restrict access via key, identity card, or password/passcode.
Limit company information on ID cards.
Lock windows that are easily accessible from the outside.
Put fax machines and copiers in appropriate areas.
Teach employees to shred all unnecessary copies of confidential information.
Restrict access to filing cabinets.
Clean whiteboards after each use.
Restrict access to computers via passwords or other ID verification.
Set Unattended computers to automatically lock and to black their screens.
Require ID verification to use any mobile communications device, such as a Blackberry®.
Before scrapping or reusing equipment, erase hard drives, disks, and so forth.
Be wary of hiring employees from competitors.
Put a confidentiality provision in employment contracts.
Provide confidentiality training for employees.
Give project members special warnings about project confidential information.
Keep records which show the projects that each employee has worked on.
Warn employees about how to behave at conferences and trade shows.
Remind departing employees of their continuing obligations regarding confidentiality, and ask them to confirm, in writing, they have returned all company property.
Notify the recipient of trade secrets, preferably in writing, that the information is proprietary and that the information is not to be disclosed or used by the recipient for the recipient's benefit or the benefit of others without the express consent of the trade secret owner.
Enter confidentiality and non-disclosure agreements with employees and third-parties.
Establish and maintain written confidentiality policies to be distributed to all employees.
Establish and maintain oversight policies and procedures to prevent the inadvertent disclosure of trade secrets in written publications, seminars, speaking engagements, or at trade shows, by employees.
Institute overall plant physical security precautions, such as fencing the perimeter of the Company premises, limiting the number of entrances and exits, using alarmed or self-locking doors, hiring after-hours security personnel.
Install visitor control systems.
Maintain access to trade secrets on a "need-to know" basis only.
Establish secretly coded ingredients or data.
Separate departments of the Company.
Separate components of a trade secret between or among departments and/or company personnel so that each has only "a piece of the puzzle."
Keep drawers or areas for secret documents and drawings separated and locked.
Stamp documents and drawings "CONFIDENTIAL" or "PROPRIETARY."
Enter vendor secrecy agreements.
Establish physical barriers to prevent unauthorized viewing of proprietary process technology.
Install "KEEP OUT" or "AUTHORIZED PERSONNEL ONLY" signs at the access points to sensitive areas of the plant, and have a policy of enforcement.
Establish and maintain written rules and regulations prohibiting employees from remaining in the plant after hours without express permission from properly authorized personnel.
Establish and maintain rules and regulations requiring employees to stay in controlled areas about their work stations.
Require employees to wear identification badges or carry identification cards.
Require sign out/sign in procedures for access to and return of sensitive materials.
Reproduce only a limited number of sensitive documents and maintain procedures for collecting all copies after use.
Require authorized codes or passwords for access to copying machines and computers. Use key and encrypted computer data access to control theft of secret computer-stored information.
Establish and maintain policies and procedures for destruction of documents (shredders).
Establish and maintain a policy and practice for advising company employees, on a regular basis, regarding the Company's trade secrets and confidential business information.
Hold "exit interviews" to obtain return of company documents and to remind ex-employees of their obligation not to use confidential information of the Company for their own benefit or the benefit of others.
Good luck protecting your trade secrets!
Talk to us
If we can help you or you would just like to talk to us, please call our office or send us an e-mail. References are available upon request.
We wish you the best of luck with your business!
Charles B. Brown
Charlie concentrates in IP (Intellectual Property) Law. Charlie has 37 years of experience as an accomplished attorney for businesses in diverse industries nationally and internationally, including as in-house counsel where he came to fully understand how to serve business clients best. He has served in leadership roles at the Chicago Bar Association and Association of Corporate Counsel and writes on IP topics.
He is active in North Shore civic affairs. He likes sailing, softball, platform tennis, old boys rugby, mountain climbing, and working on his 1967 Cutlass Supreme convertible with 206,000 miles.