Trade secrets are often a company’s most valuable asset. In deciding whether a business has a protectable trade secret, the courts usually consider the steps the business has taken to safeguard the information. An established program not only reduces the risk of losing confidential information, but also increases the likelihood that the courts will step in to protect the information if there is a loss.
The owner must take affirmative steps, reasonable under the circumstances, to protect information secrecy. This list of 24 recommendations for protecting trade secrets covers the basics:
1. Notifying the recipient of trade secrets, preferably in writing, that the information is proprietary and 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.
2. Entering confidentiality and non-disclosure agreements with employees and third parties.
3. Establishing and maintaining written confidentiality policies to be distributed to all employees.
4. Establishing and maintaining oversight policies and procedures to prevent an employee’s inadvertent disclosure of trade secrets in written publications or at seminars, speaking engagements, or trade shows.
5. Instituting overall physical plant security precautions, such as fencing the perimeter of the company premises, limiting the number of entrances and exits, using alarmed or self-locking doors, and hiring after-hours security personnel.
6. Installing visitor control systems.
7. Restricting access to trade secrets by making both physical and electronic files accessible only on a “need-to-know” basis.
8. Establishing secretly coded ingredients or data.
9. Separating company departments.
10. Separating components of a trade secret between or among departments and/or company personnel so that each has only “a piece of the puzzle.”
11. Keeping separate, locked drawers or areas for secret documents and drawings.
12. Stamping documents and drawings with “CONFIDEN TIAL” or “PROPRIETARY.”
13. Entering vendor secrecy agreements;
14. Establishing physical barriers to prevent unauthorized viewing of proprietary process technology.
15. Installing “KEEP OUT” or “AUTHORIZED PERSONNEL ONLY” signs at access points to sensitive areas and having a policy of enforcement.
16. Establishing and maintaining written rules and regulations prohibiting employees from remaining after hours without express permission from authorized personnel.
17. Establishing and maintaining rules and regulations requiring employees to remain in controlled areas.
18. Requiring employees to wear identification badges or carry identification cards.
19. Requiring sign in/sign out procedures for access to and the return of sensitive materials.
20.Reproducing only a limited number of sensitive documents and maintaining procedures for collecting all copies after use.
21. Requiring authorized codes or passwords for access to copying machines and computers. Using key and encrypted computer data access to protect against the theft of secret computer-stored information.
22. Establishing and maintaining policies and procedures for document destruction, including the use of shredders.
23. Establishing and maintaining a policy and practice for regularly advising company employees on the company’s trade secrets and confidential business information.
24. Holding exit interviews to ensure the return of company documents and to remind former employees of their obligation not to use confidential company information for their own benefit or the benefit of others.
To find out more please access our IP Primer page.
