Almost every business has at least some valuable information that they would not want their competitors to access or know. That valuable information may qualify as a trade secret under the law. However, business owners may not know what specific steps they can take and what strategies they can implement to protect the information that gives their company a competitive advantage. The experienced business law attorney at Harrison Law, PLLC, helps businesses of all sizes in Gilbert, AZ, and the surrounding are a to help businesses with protection of their trade secrets. If you are interested in learning more about your intellectual property rights as a business owner, contact our dedicated legal team at Harrison Law, PLLC, today at (480) 320-2310.
What Qualifies as a Trade Secret?
According to the Congressional Research Service (CRS), trade secrets are protected by a combination of state and federal laws, including the Uniform Trade Secrets Act (UTSA) of 1979 and the Defend Trade Secrets Act (DTSA) of 2016. The UTSA defines a trade secret as any information that:
- has independent economic value derived from not being known outside of the company; and
- can reasonably be kept a secret.
Because of the rather broad definition of the term, any type of confidential information that provides a competitive advantage to a company may qualify as a “trade secret,” including but not limited to:
- Manufacturing processes
- Product formulas
- Designs
- Ingredients
- Methods, including sales methods
- Program devices
- Codes
- Techniques
- Plans
- Supplier lists
- Advertising and marketing strategies
The owner of a trade secret must make all reasonable efforts to maintain the secrecy of and limit access to the information that they consider to be their trade secret. If this does not happen, a trade secret may lose its protection under the law.
Protecting Trade Secrets
Although federal law allows you to seek remedies when your trade secret is unlawfully acquired, disclosed, or used without your consent, there are measures you can take to proactively protect your company’s trade secrets to avoid possible damage to your business in the first place. Some of the measures that you can implement as part of your trade secret protection plan include:
- Identifying information that needs protection
- Limiting access to information that meets the definition of a trade secret
- Creating non-disclosure agreements (NDAs) for employers and third parties who have access to trade secrets
- Assessing potential vulnerabilities and weaknesses in your internal systems
- Keeping track of all locations where sensitive information is stored, including cloud services, hard drivers, and other electronic items
- Requiring all existing and new employees to pass security training
- Ensuring the physical security of the company’s buildings where confidential information is stored
- Ensuring the security of computers and networks used by the individuals who have access to trade secrets within the company (encryption, two-factor authentication, etc.)
- Limiting public access to the company, including the buildings and computers that contain sensitive information
- Creating contracts with strict confidentiality provisions about sensitive information when disclosing trade secrets to third parties (e.g., vendors)
- Consistently following all policies and procedures in the trade secret protection plan
- Reviewing the protection plan periodically to ensure that it stays up-to-date
These and other measures can help prevent your company’s confidential information from falling into the wrong hands. Consider contacting an experienced trade secret attorney at Harrison Law, PLLC, to help you develop a trade secret protection plan tailored for your intellectual property and for your business.
How Can an Intellectual Property Attorney Help Protect Your Company’s Trade Secrets?
Technically, you can protect your company’s trade secrets without anyone’s assistance. However, working with an experienced intellectual property attorney when developing a trade secret protection plan may be beneficial for several reasons:
- Assess your company’s vulnerabilities. While you may think that you have identified and eliminated all potential security breaches and threats to your confidential information, you might want to have someone to offer their unbiased opinions and recommendations based on their expertise. An experienced business and intellectual property attorney can conduct an independent assessment of the risks and vulnerabilities and develop trade protection strategies accordingly.
- Create legally effective documents. Many of the documents you will have to create as part of your trade secret protection plan will require knowledge of the law. Some of the documents commonly used to protect trade secrets that require legal expertise include non-disclosure agreements, confidentiality agreements, employment contracts, and others.
- Litigation support. If your company’s trade secrets have been stolen, disclosed, or used without your consent, you may need to consider taking legal action against the infringing party. A seasoned business and trade secret attorney can provide you with the assistance you need during the litigation process and advocate for your company’s legal interests at every step of the court proceedings.
The experienced legal team at Harrison Law, PLLC, helps business owners take proactive steps to protect their sensitive information from industry competitors, former employees, and third parties.
Frequently Asked Questions (FAQs) About Trade Secret Protection
When developing a plan to safeguard your business against trade secret theft, you may have quite a few questions, including:
How do I prove I am protecting my trade secret?
You can prove that you are protecting a trade secret if you can demonstrate that the information you are trying to protect meets the criteria spelled out in 18 U.S.C. § 1831:
- the information gives your company an economic advantage because access to the information is limited to people within the company;
- the information is not readily known by others; and
- you take proper steps to maintain the confidentiality of the information.
If any of the three criteria is not met, you may not be able to prove that you are protecting a trade secret.
How do you protect trade secrets when employees leave the company?
You can ensure the protection of your trade secrets from departing employees by including non-compete clauses in employment contracts and making your employees sign non-disclosure agreements (NDAs) when hiring them. Both of these measures prevent employees from sharing sensitive information with others after their departure.
How can an employer protect its business and trade secrets from others?
If you need to disclose your company’s trade secrets to third parties as part of your business operations, you may need to consider creating NDAs for any such disclosure. In the agreement, the parties agree not to disclose any information covered by the NDA. In fact, a trade secret may lose its protection under federal law if you disclose a trade secret to third parties without confidentiality requirements. If this happens, the court may rule that you did not make reasonable efforts to maintain the secrecy of the trade secret.
Protect Your Company’s Trade Secrets with Harrison Law, PLLC
As a company owner, you may need to consider getting legal help from an attorney to protect your trade secrets. The knowledgeable business law attorney at Harrison Law, PLLC, can help you develop and implement plans to safeguard the valuable information that provides your company with a competitive edge. Our legal team works diligently to help clients develop creative and effective solutions to preserve their confidential and proprietary information and quickly address threats of improper use or disclosure of such information. Reach out to Harrison Law, PLLC, today to start working on your trade secret protection plan. Call (480) 320-2310.
© 2024 Matthew W. Harrison and Harrison Law, PLLC All Rights Reserved
This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
