In today’s business trade secrets have become essential. They are the company’s confidential information that makes it different from the other company.
Companies invest a significant amount of money into their business to create a perfect method like advertising techniques, marketing, and sales approach and much more methods.
A trade secret may be a product, recipe, algorithm, sales strategy, business plans or anything that’s kept hidden from the public and protected for indefinitely amount of time.
Trade secrets can also contain the list of client lists and name of suppliers. If another business get’s the hold of the record, the company will suffer a loss in the market and allow the third party to capture some of their business.
Hence, it’s crucial for every business to recognize and classify the trade secrets, put some restriction access on and convey the importance. This might be a challenging process in protecting the trade secret.
But, with the expert advice and this blog, you can achieve the balance and effectiveness in protecting the trade secrets before any exposure occurs.
Importance of trade secrets in business
1. Identify What Trade Secrets Does Your Company have
It’s necessary for the one to understand what kind of trade secrets the company possesses. It is the first step to ensure that the information remains protected.
Categorize the items based on nature and sensitivity that will enable you to protect the information from a different angle. For instance, the more prudent information, the more steps a company will need in preserving the respective info.
2. Explain Your Employees on the Importance of Trade Secret
When you hired an employee, mention details and have him/her sign the non-disclosure agreement.
Take out some time in explaining to your employees the meaning of trade secret and why it’s so important to keep it confidential. Let them know what they should do about it.
Remind them not to discuss the information in public places or open areas and manage access. Documents and emails should be labeled with ‘private and confidential’ or ‘Do not make copies.’
If by any chance, the trade secret gets disclosed in publicly then it doesn’t fall under the protection of trade secret law.
3. Keep the Trade Secrets Confidential
With mere marking of ‘confidential’ on the piece of paper won’t protect the trade secret worth keeping. If the trade secrets are in written on paper, then keep them safely in a locked cabinet.
If the trade secrets are on the computer, minimize the access of information. Keep it password protected and a good IT security. Along with it, carry out regular security audits for the system protection.
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4. Understanding the Law Protection
To get legal protections for the trade secret, there’s no kind of registration needed unlike that of copyrights, patent, and trademark.
In fact, most of the states have laws prohibiting the theft or disclosure of trade secrets. Under the Uniform Trade Secrets Act, the court has agreed upon the principles.
5. Take Actions Against the Violations
The violation against trade secrets is the civil actions in which the person is to cease immediately. S/he has to pay financial damages which is the profit generally derived from the trade secrets.
At times, they also have to pay to the attorney’s fees for the possessor owning trade secrets. Some thefts have a criminal record for stealing the information in the corporate field those are charged severe penalties and imprisonment.
When you become aware of that s/he is using your trade secrets, take your actions quickly. Every so often the information you think might be your trade secret, someone might be using it independently, and you can’t do anything about it.
6. Analyze Advertising and Promotional Details
Digital presence is fundamental to expanding the business. To make it better, press releases, promotion is done making the public aware about your business.
However, one should review all the material carefully and become sure that there’s no disclosure of any trade secret.
7. Maintain Supply Chain Plans and Methods
Third parties and a few other suppliers, distributors and even customers have access to trade secrets as they need in developing the product. They are a prime source through which the trade secrets get leaked.
A third party non-disclosure agreement is a reasonable effort. However, those agreements are not enough. The companies MUST include protecting trade secret in due diligence and communicate with third parties regularly about expectations for trade secret protection.
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8. Make Trade Secrets Not Option But Priority
Cyber threats and digitization of the information have increased. It has put the trade secrets of the company at risk. To protect such sensitive and vital information, one needs to set it on top priority.
The companies need to advance the security and put systems in place to offer trade secret protection. This will help in alleviating risks and meet up to the requirement of securing the trade secrets.