According to the U.S. Patent and Trademark Office, a trade secret is information that has either actual or potential economic value because it is not generally known. It has value to others who cannot obtain the information and is subject to reasonable efforts to maintain its secrecy.
Trade secrets can include a wide-range of valuable information that provides an economic or competitive advantage over other businesses. These include customer lists, strategic plans, marketing programs, proprietary databases, software programs and formulas, for example.
Protecting trade secrets
The actions taken to protect trade secrets generally fall into three categories. These are physical security, digital security and legal measures like confidentiality agreements.
Business owners may implement physical security by storing information in a secure location and limiting access to only certain individuals. Other examples may include restricting access to certain locations within the business or using keycards to ensure appropriate access.
Digital security can include controlling employee access to particular networks and websites, using firewalls, strong passwords and encryption technology. For example, some businesses prohibit or limit the use of portable flash drives which can easily be lost and then used by unauthorized individuals to share trade secrets. They may also issue company laptops and cell phones to safeguard information.
Business owners may also consider asking employees to sign confidentiality agreements, should train employees about how to handle trade secrets and may include requirements to protect trade secrets in their employment agreements or offer letters.
An experienced attorney can provide businesses with advice about trade secrets and how to protect them, in addition to offering representation. It’s important that businesses can ensure the confidentiality of their information.