6 Steps for Protecting Your Trade Secrets
How are Trade Secrets Protected? All kinds of businesses, from large industrial corporations to small scale ventures go to extra lengths to safeguard it, because it maintains their competitive edge and ensures that their product/service is identifiable with a Unique Selling Point. This valuable resource is termed Trade Secret.
Keeping Trade Secrets Secret
What is a Trade Secret? It can be defined as a form of intellectual property (the other kinds being patent, trademarks and copyright) where by a company holds in confidentiality marketing and operational items like soft wares, recipes, formulae or other such assets, that give the business its competitive edge and sets it apart from the competition.
Available statistics reveal that in the decade spanning 2001 to 2010, theft and hacks of trade secrets resulted in losses amounting to close to 50 billion USD. The vulnerability of the trade secrets to theft and other risks vary from business to business.
Larger corporations with complex operational chains (employing thousands of employees) will require a different set of measures in keeping trade secrets secret, compared to smaller business holdings.
How to get trade secret protection
At the very basic level, all businesses must institute measures and standard codes of behavior to forestall the theft of trade secrets. In keeping their trade secrets secret, businesses can embark on the following measures:
How to Protect Your Trade Secrets
1. Staying Abreast of Relevant Laws and Statutes
Trade secrets can and must be registered with the relevant regulatory agencies within the country of jurisdiction. Various law codes stipulate penalties for those who steal trade secrets for economic advantage, especially when harm is done to the business and reputation of the original owner.
Most law courts will allow for damages to be paid to the victim of trade secret theft, depending on a number of factors that include how well known the information is both within and outside the business, the worth of the information, the degree of difficulty to replicate the secret, and the steps instituted to safeguard it.
2. Categorize and Store the Information
Trade secrets can be kept secret, when the business puts in place structures and systems that classify and store sensitive information and material in a secure computer database system or in a restricted register.
In the same vein, the business can categorize these sensitive trade secrets according to the level of importance and grant access to these store houses to employees with varying levels of authorization.
For instance, at Krispy crème, only employees at a certain management level have an idea of the ingredients for the cream topping, while the generality of other staff may be aware of what materials go into making the doughnuts.
3. The Less Disclosed, the Better
Another key strategy for keeping Trade secrets secret is to give out less information on key materials. From experience it is known that the more people who are aware of key information, the higher the probability of that information becoming common knowledge.
A strategy that could be employed could be the compartmentalization or segregation of important material, such that no one employee has all the sum parts of the trade secrets but only different aspects are revealed. In this case, no member of staff is able to key together all the portions of the trade secret.
4. Have Employees Sign Non-Disclosure Agreements
Employees and members of staff are the most direct routes by which trade secrets are stolen and made public. It becomes imperative that the business mandates that staff in constant touch with sensitive company information, sign agreements that will make them culpable if such sensitive material gets to the public domain.
It is important that before such Non-disclosures are drawn up, the business takes into account the stipulations of the law as regards the right of the employees to use the information gathered to better their own livelihoods.
Non-disclosure agreement proves particularly useful for when members of staff leave the employ of the business and move over to a rival/competitor.
5. Educate Employees on a Continuous Basis
The business should strive to keep its trade secrets secret by ensuring that relevant staffs are kept abreast of their duties, responsibilities and obligations in handling sensitive company information and material.
Harping on the importance of keeping such material confidential as well as the consequences of leaking such, will instill in them the sense of confidentiality that should go into their work.
6. Appraise Departing Staff
In keeping Trade secrets secret, it becomes imperative that the business holds a debriefing session with members of staff that have found alternative employment.
This meeting presents the perfect opportunity for the business to remind these individuals of their obligations in maintaining confidentiality and the consequences, if they renege on any signed agreements.