Businesses of all sizes need to ensure proper measures are implemented to protect their trade secrets. Let me tell you how!
In this article, I will break down the question How To Protect Trade Secret so you know all there is to know about it!
Keep reading as we have gathered exactly the information that you need!
Let me explain to you how you can protect your trade secrets!
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Let’s get started!
What Is A Trade Secret
The definition of trade secrets is very broad and can include any business information that is valuable to a person or company and is kept secret.
The Canadian Intellectual Property Office indicates that for information to be considered as a “trade secret”, it must provide value to its owner, be kept secret, and the owner takes all possible measures to keep the information secret.
The reason why a trade secret is a powerful tool for many companies in maintaining a competitive edge is that it is a very broad concept and can apply to pretty much any business information that provides its owner value from its secrecy.
Some examples of trade secrets can include company financial information, business intelligence, patterns, designs, plans, compilations, programs, source codes, prototypes, methodologies, algorithms, formulas, techniques, or others.
Some of the most famous trade secrets in the world are recipes developed by Coca-Cola or Kentucky Fried Chicken, algorithms developed by Google, platforms developed by Facebook, and many others.
Keep reading as I will tell you how you can protect your company’s trade secrets to ensure the information does not leak outside your organization.
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How To Protect Trade Secrets In Business
Companies of all sizes, entrepreneurs, business founders, and anyone having developed proprietary knowledge or data should ask the question “how do I protect my trade secret?”.
By definition, for a company to claim rights on “trade secrets”, it must essentially ensure that the information is kept “secret”.
However, this can be challenging when companies need to regularly work with business partners, manufacturers, vendors, suppliers, and other organizations in the course of normal business.
Also, a company must be mindful of its trade secrets by managing the employees and consultants who may have access to its sensitive information.
Let’s look at some of the ways companies can protect their trade secrets.
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Identify Trade Secrets
The first step is to identify what data and information a company considers valuable for its business and must absolutely protect.
For instance, a software company will want to take every measure to protect its software source code from exposure to external players.
Once the company identifies its trade secrets, we can now go to the next step.
Implement Internal Safeguard Measures
The next step is to implement internal safeguard measures to protect the identified trade secret.
Businesses should identify who has access to their trade secrets, how much of their trade secrets are accessible by their employees, where the data is located or stored, and so on.
The more people have access to the data, the more there is a risk that the trade secret is leaked whether intentionally or not.
Internal safeguard measures consist of technological measures, restricted access, and various organizational and technical measures implemented to limit access to the trade secret.
Implement Policies And Procedures
Companies that are successful in keeping their trade secrets confidential are those that generally have adopted clear internal policies and procedures guiding employees on how to deal with sensitive data.
Not only is it important to adopt proper policies and procedures to manage company trade secrets, but employees should be regularly trained and reminded of their duty to keep company data confidential.
Another key measure that must be taken to protect trade secrets is to ensure that anyone having access to the data is bound by confidentiality obligations.
This means that vendors, suppliers, manufacturers, distributors, or any external party that may reasonably need to access a company’s sensitive information to provide their services will need to sign confidentiality agreements to ensure that the sharing and manipulation of the data are controlled.
Companies will also need to enter into confidentiality agreements with their employees and consultants to ensure that they keep the data they access secret, follow internal policies and procedures to protect data, and are held accountable when manipulating company trade secrets.
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Confidentiality Agreements To Protect Trade Secrets
It’s nearly impossible to answer the question “how to protect your trade secrets” without discussing the importance of signing the appropriate confidentiality agreement.
A confidentiality agreement is a contract where the parties define what constitutes confidential information, in what circumstances it could be shared, and how the parties are to protect it.
Typically, a non-disclosure agreement or confidentiality agreement is signed between the company sharing trade secrets and third parties or employees receiving or accessing it.
Depending on the nature of business information or trade secret that is shared, the non-disclosure agreement should be adapted to provide the proper level of protection.
Typically, a non-disclosure agreement will contain provisions covering the following aspects:
- What is defined to be “confidential information”
- How confidential information can be shared and to who
- What is not considered confidential information
- What are the permitted uses of confidential information
- Undertaking to return or destroy the data once it is no longer necessary
- Obligation to protect the information with rigour
- Provide notice to the disclosing party in case the confidential information is inadvertently transmitted
- The term of the confidentiality agreement
Companies dealing with sensitive information should consult with a qualified attorney to ensure that their non-disclosure agreements are properly drafted and negotiated.
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So there you have it folks!
How do you protect your trade secrets in business?
In a nutshell, every business will need to determine its own legal, organizational, and technical measures to protect its trade secrets.
Some companies may go to great lengths in protecting their trade secrets.
A classic example is how Coca-Cola has been successful to keep its famous pop soda recipe a secret for over a century.
There is no doubt that Coca-Cola’s pop soda recipe is worth astronomical figures and Coca-Cola takes extensive measures to protect it.
For most businesses, the protection of trade secrets involves the identification of their trade secrets, implementation of measures to limit access to such data, execution of confidentiality agreements when sharing the data with employees and third parties, and various other measures to keep their trade secrets a “secret”.
If you are looking to implement measures to protect your trade secrets or need advice on your current process, be sure to consult a qualified trade secret lawyer to guide you.
AK-Law is a boutique law firm having a core focus on all facets of the business. We support businesses of all sizes in their day-to-day as well as strategic legal needs. If you want to know more about our firm, better understand what we do, or get a quote, be sure to reach out!
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