How to Protect a Trade Secret

December 29th, 2011

Welcome to Trade Secret Law Radio, we bring you the best in trade secret news, legal advice and information.  From trade secret misappropriation to trade secret agreement drafting and negotiation, we cover the issues here.

This is Brian Hall, a trade secret attorney with Traverse Legal, PLC, a law firm that represents clients and companies throughout the United States on all issues related to trade secret identification, protection, and enforcement.

Today, I will be answering the question of how to protect a trade secret. The first thing that is necessary when you are looking to protect your trade secrets is identifying them.  The initial step of identification of trade secret is critical because it allows you to identify what particular information within your company constitutes a trade secret. In addition, it is critically important to specifically identify it in the event that you would need to file a trade secret misappropriation lawsuit because many state courts require that the trade secret not be some amorphous item, but rather a particularly identified and specific item.  Therefore, if your trade secret is source code or a particular process or procedure, it is important that you document it and identify it, so that you know how to protect it moving forward.

Once you have identified the trade secret, it is important to come up with a list of ways to protect it by imposing certain access or limited access controls on that particular trade secret, and this begins by identifying who should have access to particular trade secret information.   Then, once you have determined who should have access, it is important to identify how you can limit others from getting either physical or some other access to that information.  Therefore, if you own an office building, limiting who can access particular areas where trade secret information is kept is always something that is recommended.  If the trade secret information is available on a computer or a server, limiting who can access those computers and servers is important just as password protecting and limiting remote access controls is equally important.

It is also important to make sure that there is proper processes and education for the people who will be dealing with the trade secrets.  They need to be educated about the importance of not disclosing that information in which the company or you deem to be confidential and/or trade secret.  Along those same lines, you as an employer can make them execute confidentiality agreements that include language such as non-competes and, more importantly and germane to this particular topic, confidentiality agreements that identify the trade secrets and impose duties and obligations upon the employees against unauthorized disclosure of those trade secrets.

It is the fairly common case where an ex-employee leaves and absconds with that trade secret information and goes to either a competitor or someone else.  In that instance, you are in a much stronger position to rely upon your confidentiality agreements as part of an employment agreement or independent contractor agreement as part of your trade secret misappropriation cause of action.  There could also be a breach of contract cause of action if you properly had them execute these kinds of agreements.  Regardless of the particular state you are in, the states all require these types of security measures in order to maintain your trade secret and properly establish your protection of it.  Keep in mind, that in order to establish a trade secret, it needs to not only be not generally known to the public and confer some sort of economic benefit upon the trade secret holder because of it being secret and not generally known to others, but there has to be reasonable efforts to maintain its secrecy and that third prong of a trade secret is really what we are talking about here today.

So, when you are trying to answer the question of how to protect a trade secret, it is important to know that reasonable efforts must be made in order to maintain the secrecy of a trade secret in the event that you need to bring a trade secret misappropriation lawsuit or other cause of action.

So, once again, this has been Brian Hall answering your question of how to protect a trade secret.

You’ve been listening to Trade Secret Law Radio, where trade secret protection, legal cases, and defenses are always the topic of the day.  Whether you are a trade secret attorney, a business looking to protect your trade secrets or have been accused of trade secret theft, we will answer your questions here.

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One Response to “How to Protect a Trade Secret”

  1. We often get questions from clients concerning trade secrets. Trade secret law is one of the most complex areas of law within the intellectual property law space. Before you ask yourself how to protect a trade secret you 1st have to understand what ideas, documents, process, software, customer lists, etc. might qualify as a trade secret. If you don’t protect your intellectual property as a trade secret, no court will enforce a court order against an employee, partner or contractor who removes the trade secret from your company and uses it for their own purposes.

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