A trade secret is a piece of information that is confidential, can be legally protected, and gives your company a competitive edge. Some of the most famous examples involve recipes: the formula for Coca Cola, McDonald’s Big Mac “secret sauce”, or the Mrs. Field’s chocolate chip cookie recipe that caused such a legal stir in the 90s. But you don’t need to be a food purveyor or a mega-corporation to have a unique approach that sets you apart from your competition.
Here are four steps you can take to keep trade secrets safe:
#1. Make a list:
The first step in protecting trade secrets is knowing that you have them. Look across your business and think about any types of information you possess that are both confidential and critical to your success. In legal terminology, the trade secret must be both a “secret” and must provide you with a “competitive advantage.” Trade secrets could be product designs, customer lists, marketing plans, sales forecasts, or processes. For software developers, proprietary codes need protection and for restaurants and food stores, it may be the secret recipe.
#2. Stake your claim:
Once you identify your trade secrets, it’s essential to start (or continue) treating them like secrets. Stamp or watermark “confidential” on sensitive documents. Put confidentiality and non-disclosure agreements in place with employees and vendors. These agreements will put the people who learn your secrets on notice not to usurp them, and these documents will lay the basis for a legal claim, if necessary.
#3. Lock it up:
Take whatever steps are reasonably available to you to secure your trade secrets from access. Digital files and systems should be encrypted and password protected. Physical files should be kept locked. Establish rules around access to sensitive files. If possible, use a badge system to control access to your facility and post signs to designate areas where access is controlled.
#4. Train your troops:
Many disclosures of trade secrets are inadvertent slips by an employee who simply did not know better. While that may make it easier to forgive, the negative impacts on your business are still there. Help to prevent this with proper training on what your company considers confidential and informing your employees of their obligations. Also ensure that your company has strong written policies. Importantly, when an employee leaves, shut down their access to your files and systems right away to help ensure that your secrets don’t leave with them.
Whether your trade secret is a treasured family recipe, a brilliant string of code, or a closely guarded customer list, it won’t be a secret for long unless you are careful. Consider the steps above as the foundation for a solid trade secret strategy.
By: Danielle Taylor