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5 steps to protect your trade secret

 
Intellectual property, including trade secrets, can serve as one of the most valuable assets in an organization.  Like most assets, however, if trade secrets are not protected, their value can quite literally vanish overnight. As such, it is important for businesses to protect their trade secrets. Here are five common practices that businesses frequently use to protect trade secrets: 
 
1.  Classify and conspicuously designate trade secrets.  After identifying your business' trade secret(s), clearly designating such materials as trade secret by stamping them "TRADE SECRET," is an easy first step to establishing protection. Caution should be exercised, however, when designating materials so as to avoid mistakenly identifying materials that are clearly not confidential - a mistake that can dilute the effectiveness of the entire protection process.
 
2. Use nondisclosure agreements.
Incorporating the use of nondisclosure agreements, especially for individuals that come into contact with trade secrets and confidential information, can add further protection. Well-crafted nondisclosure agreements often: (1) identify materials that are deemed trade secret/confidential; (2) include disclosure restrictions (e.g. restrictions on disclosure to vendors and other third-parties); (3) address the term of protection (e.g. perpetual v. term of years); and (4) provide for enforcement.
 
3.  Incorporate destruction strategies.
Using shredding equipment when disposing of physical materials that may reveal trade secret information is yet another logical, yet often overlooked step in protecting trade secrets. Caution must also be exercised when disposing electronic equipment that has stored trade secret information.  
 
4.  Adopt computer security practices.
Trade secrets and confidential information contained in computer systems may be protected through encryption as well as strong passwords and restricted access. Such practices help reduce misappropriation by not only outsiders, but also by inside employees with ulterior motives.
 
5.  Proactively consider departing employees.
Whether during an exit interview or otherwise, when employees depart it serves as a logical opportunity to remind employees of their confidentiality obligations and be provided with copies of any nondisclosure agreements.
 
If you are working to protect a trade secret, you should consider contacting a licensed attorney who practices in this area of law.

 

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