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How can your business protect its trade secrets?

| Apr 1, 2021 | Uncategorized

It can be difficult to gain a competitive edge in modern business. You may have to spend years or thousands of dollars to come up with your own formula, locate the best companies to collaborate with or create a new production process.

Whether you are in business-to-business product sales or manufacturing, your trade secrets are what help make your company profitable. Although your trade secrets have federal protection as a form of intellectual property, you still need to take proactive steps to protect that information.

Every employee who has access to this important information is a potential source of lost revenue. How can a company protect its trade secrets so that employees don’t try to monetize information that is crucial to your company’s success? 

Limit who has access to important information

Whether you have a unique recipe for barbecue sauce that no one else seems to be able to duplicate or you have spent decades amassing a list of local clients, you want to make sure that your company’s secrets don’t become publicly available information.

When you hire someone, the potential exists for them to take trade secrets from your company and use them for their own benefit or sell them to your competitors. Limiting who has access to your trade secrets or only allowing certain employees access to part of the information can be a way to protect your trade secrets from potentially unscrupulous actors.

Protect your trade secrets with inclusions in your employment contract

Limiting who has access to information or never giving the full formula or list to one person is a step in the right direction, but you could still be vulnerable to employee misconduct that could affect your business. Any worker who might eventually have access to your trade secrets is a source of liability for your company.

You may want to include clauses in your employment contract that you have people sign when you hire them or transfer them to positions of more authority. These contracts can include non-disclosure agreements that specifically prohibit employees from sharing information they learn at your company with others.

You may also want to include a restrictive covenant that forbids workers from competing against your company in the future. That will prevent an unsatisfied worker from quitting and taking information to one of your competitors or starting a business of their own. The sooner you take steps to protect your trade secrets, the easier it will be to take action if someone violates your intellectual property rights by stealing or sharing your trade secrets.