Many businesses may not realize they have trade secrets, much less understand how to protect them. The term "trade secrets" encompasses more than just recipes. A wide range of intangible assets fall under this category, including formulas, methods of operation, client lists and other tools necessary to run your business.
As these assets are often the backbone of the success of a company, it is vital to identify what needs protecting and take measures to safeguard that information.
The Small Business Association offers these 5 tips for protecting your trade secrets:
- Identify trade secrets-Think about your business operations and what information would compromise that if it got into a competitor's hands. Make a list of these assets and determine what is the most valuable.
- Keep trade secrets confidential - Label trade secrets as "confidential" and keep them in a secure place. Store hard copy information in a secure area. Limit access to electronic files and make sure they are password protected.
- Educate employees - Employees should sign a nondisclosure agreement and understand company policy regarding handling protected information. Plan periodic training and refresher courses on trade secret confidentiality.
- Understand the law - Historically, trade secrets have not required a national or international registration, but were governed by individual state laws. Beginning in 2017, the Defend Trade Secrets Act of 2016 will offer additional legal protection at the federal level.
- Take civil action against violations - If you discover a competitor is using your trade secrets, act quickly to stop it. You may be able to file a civil lawsuit for injunctive relief (a cease and desist) and monetary damages if trade secrets were acquired through improper means.
As with any legal issue, an experienced attorney can assist you in establishing trade secret protection or during trade secret litigation. Contact a qualified lawyer to discuss your needs.