Implementing a Plan to Protect Your Company's Trade Secrets
by William Murphy
If you are a new and growing business, part of your success may be due to the fact that you employ proprietary techniques or have information that your competitors do not. Protecting this information is essential to your continued success. You wouldn't want a key employee to decide to start a business that directly competes with yours and take your company's proprietary information with her. This is but one of many scenarios in which your business could be hurt if the company's trade secrets are not protected.
A trade secret is information used by your business, or a procedure, method or technique that your business employs that is not generally known to others. When your business derives an economic benefit from this information or method, it is a trade secret. Examples of trade secrets are customer lists, business plans, marketing plans, pricing schemes, and research and development information. Your business should implement a plan to protect these valuable trade secrets from inappropriate disclosure or theft.
As a first step, you should require confidentiality and non-disclosure agreements with any party that might come into contact with your company's proprietary information. This would include suppliers, investors, employees and anyone else that has access to trade secrets. Before you enter into a relationship with any person or business, determine whether they will be in a position to discover any confidential or proprietary information. If so, make sure that they sign a confidentiality and non-disclosure agreement.
You should also make sure that your employees sign a non-compete agreement. This agreement limits a former employee's right to work for someone who is a direct competitor of your business. You should also educate employees during the course of their employment with you and when employment terminates about their continuing obligations in regard to your proprietary information. When the employment relationship ends do not permit the departing employee to have access to proprietary information. You should supervise the departing employee's removal of personal items from the workplace to make sure that no proprietary information is taken.
Establish procedures for limiting access to proprietary information within your business. You should control the distribution of proprietary information as much as possible to make sure that only those who need it receive it. Provide a method for securing information on the premises such as a locked filing cabinet. Indicate on any confidential documents that the information is proprietary and confidential. This will provide notice to anyone who comes into contact with the information. Limit the photocopying or other copying of proprietary information. Make it a policy to shred documents before discarding them. Restrict access to your business by visitors and do not allow anyone, a visitor or not, to bring in video cameras.