Ansons are pleased to announce that we will be publishing a “Back to Basics” series over the coming months with a focus on the basic facts of each form of IP.
IP has a breadth of coverage, of which some people may be unaware. It stretches from trade marks, patents and designs, the better known forms of IP, to copyright and trade secrets. Today we are going to focus in on one of the less well known forms; trade secrets.
What are Trade Secrets?
Trade secrets are an unregistered form of IP. There are no records maintained by Intellectual Property Offices and their existence is only recorded by the owner of the trade secret. Trade secrets include any type of information that is not generally known or capable of being reverse engineered by others, by which a business can obtain an economic advantage over competitors or customers, now or in the future.
These can include; a practice, manufacturing process, survey method, formula, recipe, business plan, algorithm, software code, marketing information, failed test result, competitive analysis, product road-map, non-patented and undisclosed invention, data (raw and processed) such as client data, supplier data, test data, cost data and maintenance data.
How are Trade Secrets protected?
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. The key recommended steps are as follow:
- Accurate record keeping of identified trade secrets;
- Develop a companywide protection policy;
- Restrict access to the trade secret;
- Mark documents as confidential;
- Physically isolate and protect the trade secret;
- Restrict public access to facilities;
- and create measures for employees to ensure secrecy is maintained.
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 of the trade secret;
- Date it was created;
- Person who created it;
- Physical location;
- Legal owner;
- Responsible manager;
- Type of trade secret (such as a practice, manufacturing process, recipe, business plan);
- Person(s) with authorised access;
- Costs associated;
- Protection mechanisms in place;
- Whether it has been shared and if so when and with whom;
- Expiration date (if applicable, for example publication date of unpublished patent application);
- Legal/IP advisor associated with the trade secret;
- Financial advisor;
- and when and by whom the trade secret was last reviewed.
To ensure that each trade secret remains confidential, we would 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;
- be 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. Should you have any queries about how best to protect your trade secret please contact us at firstname.lastname@example.org and we would be pleased to assist you.