Protecting your Company’s Trade Secrets: What You Need to Know

Trade secrets are often the foundation of a company's success. Maintaining the exclusivity of the trade secret is critical to staying ahead of the competition - which is why companies like Coca Cola purportedly limit the knowledge of their formula to only two executives.

Your business trade secret may include formulas, recipes, plans, drawings, processes, methods or techniques. It may also include business strategies, cost and pricing information and information relating to your employees.

As a business owner, it is up to you to recognize your trade secrets and take the necessary steps to ensure that they remain as such. Trade secrets are protected not by patents, but by keeping them under lock and key. They are protected by limiting access to them, by requiring employees and any other individuals who may view them to sign nondisclosure agreements, and by maintaining excellent records that show your attempt to protect your business trade secrets.

Steps to Protecting Trade Secrets:

• Identify and document your business trade secrets often, at least on an annual basis. You can't expect others to keep your business trade secrets confidential if they are unsure of what they are.

  Keeping your employees aware of the confidential information and reiterating the importance of keeping the information confidential is often the most important step to remember when dealing with business trade secrets.

• Ask your employees to sign confidentiality agreements (also referred to as non-disclosure agreements or NDAs).These agreements legally bind them to not disclose trade secrets. It may also prove to be beneficial if you also have a meeting with your employees to discuss the importance of protecting trade secrets.
• Draft a new confidentiality agreement on an annual basis or as new business trade secrets are acquired to protect yourself, your employees and your company. Keep all records of signed nondisclosure agreements in your employees' files, as well as in another separate location.
• If possible, control access of your business trade secrets to only those employees that need to see them to perform their job. In other words, limit your employees' access to any confidential information unless they have a legitimate need to know.
• Limit access and monitor employees' access to any business trade secrets by setting up a secure computer system that uses a series of passwords and controls.

  A computer system that is monitored through passwords can keep good track of who is viewing your company's trade secrets and when they are viewing them. Passwords can also allow you to control who has access and when, thereby allowing employees access to your business trade secrets only when their job duties require it.

• Assign a certain, secured area within your business to keep your business secret information. Do not reveal this location to anyone that does not need to know.
• Maintain a secure building and limit access by visitors to certain areas of your facility as to lessen the likelihood of them gaining access to your business trade secrets.

By taking a proactive approach to protecting your trade secrets, you keep your company's success in good hands.