Washington, D.C. Location
Making sure your start-up company has a competitive edge can be the difference between success and failure. Valuable company information should be safeguarded so that it is not leaked or lost to competitors.
What is a trade secret?
A trade secret is valuable business information that is not generally known by competitors. Proprietary trade secrets can be found in:
- Research and development
- Secret formulas
- Computer source code
- Manufacturing tools
- Marketing, sales, and financial and administrative data, such as customer lists and marketing plans.
Trade secret law protects valuable proprietary information that is shared in a confidential relationship, such as between employer and employee or between customer and vendor. However, not all information qualifies as a trade secret. A variety of factors apply to determine whether information qualifies as a trade secret:
- To what extent is the information is publicly known?
- To what extent is the information known to employees?
- What measures have been taken to guard the secrecy of the information?
- What is the value of the information to the company and its competitors?
- What are the costs and expense to develop the information?
- How easily can the information be properly acquired or duplicated?
How do I protect my company’s trade secrets?
There are several steps you can take to limit your exposure to intentional or unintentional trade secret leaks:
- Provide written notification of trade secret status to recipients of trade secrets;
- Prepare confidentiality and non-disclosure agreements with employees and others;
- Establish confidentiality policies that are distributed to employees;
- Maintain oversight procedures to prevent the inadvertent disclosure of trade secrets;
- Implement physical security precautions and visitor control systems;
- Provide access to trade secrets only as needed;
- Limit reproduction of sensitive documents and maintain procedures to collect all copies after use; and
- Interview departing employees to obtain return of company documents and to remind ex-employees of their obligation not to use confidential information owned by the company.
Contracts are crucial to protect trade secrets, to avoid disputes, and to take advantage of licensing opportunities .
In the “information age”, competitive advantage can be achieved by developing and maintaining strategic data that is not available to competitors. Be sure your company’s trade secrets are protected, and that any violators of trade secrets law can held accountable for lost profits and lost opportunities.