Do you know what a trade secret is? Do you know how to go about identifying and protecting your trade secrets? Read more to find out more about how you can manage these vital assets for your business.
Trade secrets are an unregistered form of IP. There are no records maintained by Intellectual Property Offices. Your business can obtain an economic advantage over competitors or customers by protecting your trade secrets.
A trade secret is something that is not known or capable of being reverse engineered by others, for example a practice, manufacturing process, formula, business plan, algorithm, software code, marketing information, failed test result, competitive analysis, product road-map, non-patented invention, data (raw and processed) such as client data, supplier data, test data, cost data and maintenance data.
Trade secrets are:
- not in the public domain
- kept secret
- of value now or in the future
We advise protecting your trade secrets by documenting them, by controlling and limiting access and by having a legal framework in place prior to sharing.
In order to document your trade secret, you should keep a record of the metadata connected with it to summarise basic information about the trade secret, for example:
- Name/title
- Date created
- Creator
- Physical location
- Legal owner
- Responsible manager
- Type of trade secret
- Person(s) with authorised access
- Costs associated
- Valuation
- Protection mechanisms in place
- Shared (and if so with when and with whom)
- Expiration date (if applicable)
- Legal/IP advisor
- Financial advisor
- Reviewed (when and by whom)
Once you have documented your trade secrets, you will need to take practical steps and precautions to ensure that they remain secret to your business.
To ensure that each trade secret remains confidential, we also suggest taking the following precautions:
identify valuable information and high risk areas;
mark confidential or privileged documents as such and have written policies in place to ensure company-wide clarity and consistency;
being mindful of staff relations, consider the careful use of “mystery shoppers” to check if confidential information can be seen or otherwise accessed;
question new employees on their background so as to avoid utilising someone else’s trade secrets;
train staff continually in the importance of trade secrets, ensuring they understand the company policy;
when an employee leaves, conduct audits and ensure that all confidential documents have been returned to avoid the ex-employee taking a trade secret intentionally or accidentally, for example, check if it is permissible for your IT department to monitor outgoing document traffic in the time up to the employee’s departure;
when working with third parties, use non-disclosure agreements tailored to what is to be shared and keep date stamped records of information shared, e.g. what, to whom, when;
always follow up confidential discussions in writing affirming that, as was clear to everyone at the meeting, the information shared was confidential.
By following these simple steps, you can increase the chances of obtaining an economic advantage over competitors.
We look forward to assisting you with the above should you require any further information. Please contact info@ansons.co.uk or mail@machlachlan.ie for further info.