In today’s competitive business environment, losing such vital information as your company’s trade secrets can significantly diminish its competitive edge. It is imperative that as a business owner you understand how best to protect such valuable business information so that you can avoid unintentional disclosure and potential litigation.

What is a Trade Secret?

A trade secret can be any information from which your business derives actual or potential economic value from not being disclosed or generally known to the public or to your competitors. Trade secrets can be almost any information that helps your business be competitive. It can be something as simple as a customer list or as complicated as a manufacturing process. The critical element is that you not disclose valuable business information to anyone outside of your company without taking the necessary precautions to keep it secret.

How Do I Protect my Business Information?

Some business owners do not understand the importance of having a secrecy or protection plan in place before valuable business information is mistakenly disclosed to a competitor. After information is disclosed to an unauthorized outsider, the information is no longer a trade secret and your business no longer enjoys exclusive use of that valuable information.

The first step is to physically protect the information in a secure location, if possible. The next step is to promote a corporate culture that will help ensure secrecy. For example, all employees should be trained regarding the importance of keeping trade secrets and the dangers of their disclosure. Access to trade secrets should be limited to only those personnel who need the information to do their jobs. Individual passwords and security access codes can help control who has business information and how that information is used. The court will not protect information that an owner does not value. The court examines the efforts an owner makes to protect a trade secret to determine whether or not the information is valuable to the owner.

Confidentiality Agreements

Trade secrets can be protected even if the information is used by others outside of the business. Often businesses must interact with other companies in their day-to-day operations. A good solution is to enter into confidentiality agreements with outsiders that allow them access to the information without risking impermissible disclosure. Such agreements can be drafted to maximize your protection and control over your valuable business information.