When it comes to protecting your company’s intellectual property the stakes are incredibly high. In addition to a company’s employee base, its intellectual property is, for all intents and purposes, its crowned jewels. There are different types of intellectual property, such as patents, trademarks, and copyrights, but an all too important and often inadequately protected form of intellectual property is a company’s trade secrets.
According to the United States Patent and Trademark Office, trade secrets consist of different types of information and can include a formula, pattern, compilation, program, device, method, technique or process. Depending on the industry your company is in, trade secrets may also include such things as technical or non-technical data, drawings, financial data, financial plans, product plans, a list of actual or prospective clients, licensors, or suppliers, or other information which is not commonly known by or available to the public.
To qualify as a trade secret, according to the Federal Defend Trade Secrets Act of 2016 (“DTSA”), the information must: (1) derive economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) be the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
What this all boils down to is that companies that genuinely have trade secrets need to do more to protect them than to casually acknowledge they exist, and then allow them to fall by the wayside. Take heed, if your company has legitimate trade secrets, it would be well served to make efforts to actually protect them. There is far more to this concept of protecting trade secrets than can fit into one blog, but in essence, pay close attention to what the DTSA is truly saying. In its simplest form, if your company wants to protect its trade secrets, limit access to them only to those individuals who have a need to know them, and what is more, make efforts (more than merely reasonable efforts in my opinion) to ensure the trade secrets are held confidentially and stored in secured and monitored locations. The moment a company publicizes its trade secrets, by definition, they are no longer secret, and the company loses its ability to claim them as such. For this reason, it is imperative to not only understand what your company’s trade secrets are, but to go much further and put procedures and protocols in place to make sure they are being protected from unauthorized access and disclosure.
In addition to the foregoing, a good suggestion for protecting your company’s trade secrets is to put Restrictive Covenants Agreements in place with your employees and independent contractors who may have access to those trade secrets. And further, within those Restrictive Covenants Agreements, ensure they include the DTSA “Notice of Immunity” (also known as the whistleblower provision). Without the Notice of Immunity, your company will have a very difficult time imposing its trade secret rights, as this provision is a critical requirement for trade secret enforcement.
When it comes to protecting your company’s trade secrets, most assuredly, knowledge of what that intellectual property is and the appropriate protection of it should be the primary takeaways. Contact Hunter Business Law for any questions or concerns you may have regarding the identification and protection of your trade secrets.
This Blog was written by the Hunter Business Team.
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