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5 Ways to Protect & Police Your Trade Secrets

In an information economy, the primary things that bring value to your company, equipment, holdings, and capabilities are trade secrets. Unlike patents or trademarks, trade secrets do not require public disclosure—on the other hand, losing such information to a competitor (or former employee) could cost massive amounts of revenue and market share.

Protecting your trade secrets serves a dual purpose. The obvious purpose is to preserve your business’ long-term growth and competitive edge, as well as its goodwill value. The other purpose is to show a court that you took steps to protect your intellectual property (IP), which helps strengthen any IP lawsuits you’ll need to file. Below we’ve assembled some of the best ways you can protect your trade secrets in concrete and demonstrable ways. If you still have questions after reading the list below, we invite you to contact our attorneys.

#1: Label Vital Documents as Confidential

This is the most basic step your organization can take. Review your company’s internal resources and documents—are any of them vital to your operations? Would you lose anything if they fell into a competitor’s hands? As you review your documents, gather and label all your most vital resources, whatever they are: customer lists, data, methods, procedures, suppliers, etc.

Even a simple labeling system could lend credence to your case if someone attempts to use your IP unlawfully.

#2: Strengthen Your Non-Disclosure Agreements

Review your policies and procedures that are designed to ensure confidentiality. If you don’t have specific procedures in place to protect your trade secrets, that’s where you start. Draft clear non-disclosure agreements (NDAs) for both employees and third-party vendors—courts look favorably on contracts that protect IP.

Once these policies are documented and implemented, make sure your organization documents their ongoing review and enforcement. Create a demonstrable history of monitoring your organization’s protective measures. Over time, you’ll build a strong body of evidence that you took reasonable steps to protect your trade secrets.

#3: Restrict Access Physically & Electronically

Invest in your IT security capabilities. Ensure that only authorized employees and third-parties can access your resources, either with physical or limited electronic access. If you can, establish levels of access—this ensures that only necessary employees have access to your most vital resources.

#4: Make Trade Secret Protection Part of Your Due Diligence

When working with a supply chain or in a joint venture, it’s vital to investigate their policies for protecting trade secrets. If a vendor has no measures in place to protect your trade secrets, avoid doing business with them. Make sure any suppliers you work with understand your expectations regarding IP protection, and review their policies and practices on an ongoing basis.

#5: Create a Team for Handling Trade Secrets

One of the strongest ways you can protect your trade secrets is by appointing an individual or creating a team devoted to drafting and implementing your protective policies. Their commitment doesn’t have to be exclusive—it would be more effective to create a team with multiple functions, with the tools and authority to enforce trade secret protection. During this process, it is highly recommended to secure the services of a knowledgeable attorney.

These five practices have been shown to help businesses protect their most vulnerable and vital resources both practically and legally.

If you need counsel to draft your non-disclosure agreements, non-competes, or your corporate policies regarding trade secrets, contact our Houston business litigation firm at (713) 909-7323. We have spent decades helping Fortune 500 companies and small businesses protect their long-term growth and competitive edge.

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