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What should I be doing to protect my trade secrets and confidential business information?
May 21, 2007

The first line of defense for the protection of trade secrets and confidential business information is the adoption and maintenance of a proactive trade secret protection plan that will avoid trade secret misappropriation in the first place, and optimize the company’s position should it become necessary to seek legal remedies.

What are the common risks to trade secrets?

Trade secrets may be misappropriated by employees, licensees, consultants, business partners, or business competitors. But the most common risk to trade secrets is often internal -- trade secret misappropriation by current or former employees who take company secrets or confidential information (often by downloading or retaining certain confidential computer files) and move to a competing company or start their own competing business.

Seven suggested practices 

Any information that qualifies as a trade secret should be subject to the following policies at a minimum to ensure that  protection is not inadvertently lost:

1. All documents and other material containing confidential trade secret information should contain copyright notices when appropriate, and a clear and conspicuous notice that the information is confidential and not to be disclosed without authorization.
2. All employees, consultants, licensees or business partners who have access to the trade secret information should execute agreements that obligate them to keep company information confidential.
3. A dated log should be maintained to record each person who receives a copy of or access to the trade secret information.
4. All employees and consultants  should be interviewed prior to commencing work to determine the extent, if any, to which they are bound by outside confidentiality agreements that might impact their new obligations, and to emphasize the necessity of protecting the company’s trade secrets.
5. All employees and consultants whose employment with or engagement by the company has been terminated for any reason should be given an exit interview and be asked to sign a termination statement confirming that they have returned all materials belonging to the company. (In a future post, we will cover the subject of exit interviews in more detail.)
6. Before the disclosure or demonstration of any trade secret to any prospect, licensee, business partner, client, or other interested party, that party should be required to sign a non-disclosure agreement.
7. All published works in any way relating to the trade secrets of the company should be screened to ensure that trade secret information is not being disclosed.
    
   A company may also protect important business information through the use of employee non-competition agreements; that subject will be covered in a future post.

   The posts on this blog reflect the personal views of Jeffrey D. Neuburger, in his individual capacity, and do not necessarily represent the views of his law firm or his clients, and are not sponsored or endorsed by them. The information contained in this blog is provided only as general information for educational purposes, and no warranty or representation is made about the accuracy of the information provided. Blog topics may or may not be updated subsequent to their initial posting. This information is not provided in the course of an attorney-client relationship and is not intended to constitute legal advice. This blog should not be used as a substitute for competent legal advice from a licensed attorney in your state.
   
   

   Posted by Jeff Neuburger on May 21, 2007 | Comments (0)