Maybe you think your business isn’t big enough to have trade secrets – but if you have a list of customers, you have trade secrets. And trade secrets are worth protecting.
A trade secret is defined as any valuable commercial information that provides a business with an advantage over competitors who do not have that information. Trade secrets tend to fall into two categories – either technical information or business information.
Examples of technical trade secrets include:
- Plans, designs and patterns, such as those for specialized equipment
- Processes and formulas, such as those for the manufacture of drugs, foods, chemicals or other materials (e.g., the formula for Coca-Cola)
- Methods and techniques for manufacturing
- Engineering notebooks
- Negative information – the UTSA definition of a trade secret “includes information that has commercial value from a negative viewpoint, for example the results of lengthy and expensive research which proves that a certain process will not work could be of great value to a competitor”
- Computer software (programs or source code)
Examples of business trade secrets include:
- Financial information prior to public release
- Cost and pricing information
- Manufacturing information
- Internal market analyses or forecasts
- Customer lists
- Unannounced business relationships one is negotiating or has entered into
- Information about business opportunities, such as opportunities to acquire another company or product
- Marketing and advertising plans, both for existing and planned products
- Personnel information – for example, key employees that have specialized skills or knowledge, or compensation plans for sales people
After reviewing this list of potential trade secrets it becomes obvious that a business doesn’t have to be Coca-Cola to have a few secrets of their own. So what are some steps a business owner can take to protect their trade secrets?
Here are a few tips for small business owners:
- Put employees, vendors, contractors, and other personnel on notice of the existence and nature of the confidential information and make them aware of their part not to disclose it. Contracts can be put in place for an added level of assurance.
- Give employees and contractors guidelines on what is considered trade secrets and how that information should be handled.
- Have employees, contractors, and vendors sign non-disclosure agreements whenever appropriate.
- Clearly label documents that are confidential.
- Put locks on doors and file cabinets that contain confidential documents.
- Have specific processes for visitors – signing in, wearing badges, etc.
- Require security passwords for computers and networks.
The first step towards keeping your trade secrets a secret is to recognize that you have something valuable worth protecting. Then you can identify the steps that will help keep your secrets secure.
Another tip to protecting your trade secrets is to properly dispose of data containing devices that may have company information stored on them. Proper data destruction is our specialty. Contact us if you have data containing devices that require destruction – let us help you keep your trade secrets secure.