Reading Time: 2 minutes

When it comes to intellectual property, or IP, many people’s knowledge begins and ends with patents. It grants inventors exclusive commercial use of their creations. And, yes, if you invent something potentially valuable, you may very well want to invest in obtaining a patent. But most companies haven’t invented anything — and yet they still own intellectual property that needs protection.

trade secret

Their names, for example, are trademarks. Some may copyright written work. And most companies have trade secrets, which include “any formula, method, or information that gives you a competitive advantage,” says Susan F. Fisher, an attorney with Denver’s Fairfield and Woods. “Anything that takes time, money, or effort to develop and that you don’t want your competitors to know about.”

Trade secrets are rarely breached as a result of a determined adversary, such as an industrial spy or disgruntled employee. Instead, says James Pooley, a partner in the Palo Alto, California, office of Morrison & Foerster and a past president of the American Intellectual Property Law Association, “the vast majority of instances of loss of confidential information are inadvertent.”

For many companies, their intangible assets of patents, copyrights, trademarks, domain names and trade secrets represent the majority of their value. Entrepreneurs are often proactive and file for domestic and international patents, copyrights and trademarks.

However, frequently, entrepreneurs fail to implement procedures to protect their trade secrets and confidential information. A panicked CEO will be worried about a key salesperson who has stolen the customer list, or about someone who has made inadvertent posts online.

Well-implemented procedures for protecting trade secrets and confidential information may help a company protect their valuable intangible assets. Here are 11 strategies to consider:

1. Designate a trade-secret compliance officer

Designate an individual responsible for identifying intellectual property and implementing and enforcing all aspects of your trade secret compliance program, including recordkeeping, distribution and collection of operations manuals, conducting exit interviews and responding to questions relating to the protection of your trade secrets.

2. Include protection in training programs

Make trade-secret protection a part of your employee orientation and training program, during which a full briefing should be given on each employee’s continuing duty and legal obligation to protect your trade secrets. Inform those employees who have access to trade secrets of their continuing duty and legal obligations to protect those trade secrets.

3. Limit disclosure of confidential information

Limit disclosure of trade secrets and confidential information, whether in written or oral form, to only those individuals who have a genuine need to know the information in order to perform their jobs. Ensure all employment agreements, independent contractor agreements, sales agreements and license agreements include appropriate confidentiality provisions.

VComply

4. Require confidentiality agreements

Require  employees and anyone else who has access to your trade secrets to sign a carefully prepared confidentiality and nondisclosure agreement.

5. Limit the copying of confidential materials

Do not permit individuals to make copies of confidential information except as necessary to perform their duties.

A good trade-secrets policy can minimize the chances of problems. You may want to consult a business lawyer, perhaps an IP specialist, for guidance.  Read more about underlying concepts of risk management here.

Previous                                                                                                                Next

FavoriteLoadingAdd to favorites