5 Ways to Keep Your Business Trade Secrets from the Competition

A Trade Secret Must Be an Actual Secret

A trade secret should be information that is not known to the public. It must not be available to competitors. The only exception would be use of illegal or improper means.

This is why business owners must carefully review the information that they give to outsiders voluntarily. Also, businesses should monitor information that is given to potential customers, information that is posted on websites, and information that is provided to trade associations.

Use a Warning Label

A sticker or written label can protect and classify trade secrets. Business owners should use a rubber stamp on the footer or header of every trade secret document. The stamp should be labeled as confidential.

Restrict Electronic and Physical Access

Access to trade secret documents should be on a need-to-know basis. Trade secrets can be stored in a locked filling cabinet or on a computer with very secure passwords. Do not toss your documents in a trashcan without shredding them first. In addition, do not merely delete digital documents; instead, use advanced software to completely wipe them out.

Everyone Should Sign Confidentiality Agreements

When trade secret information is given to an individual who does not work for the company, that person must sign a confidentiality agreement. Also, consultants, employees, business partners, and independent contractors should sign an agreement if they will have access to the trade secrets.

Establish Procedures and Priorities

A trade secret can be a customer list, projections, a manufacturing process for a food product, or financials. Safeguards will protect a trade secret, and they show judges and juries that protection procedures were implemented if a dispute ever occurs.

To prioritize proprietary information, consider each category’s importance and the risk of loss. Next, determine how the measures will protect every category.

Bonus Procedure – Educate the Employees

Ensure that each employee studies the company policy in the employee handbook. The policy should mention why keeping confidential information is important and how the company will be affected trade secrets are breached. The policy should also provide procedures that employees can implement to protect the trade secrets.

Bonus Procedure – Use a Trademark

When a business owner publicizes a business, the business owner claims a trademark. There are two types of trademarks; most businesses register as a statutory trademark at a Trademark Office. However, a common-law trademark belong to a business owner once a particular name is used; it does not have to be registered if it does not infringe on another trademark.

However, businesses who plan to go national should register before taking sales. If another business uses the same name, a registered trademark forces the business to change its name.

These procedures help businesses protect their valuable trade secrets.

Author: Karleia Steiner is a freelance blogger. Informational credit to Paper Recycling & Shredding Specialists.