Can you identify the single biggest threat to your trade secrets? It’s not hackers or cybercrime: recent research shows that over 85% of trade secret lawsuits are actually against employees and business partners.
Although there’s an element of risk in bringing anybody on board, here are five simple ways you can mitigate your risk, working proactively to keep your trade secrets as safe as possible.
1) Clearly define your secrets
Unlike patents, trade secrets don’t have to be formally registered, but creating an internal list of trade secrets you control will make things very clear for employees and business partners and help them understand what can be shared. Once you’ve created this list, you’ll be able to make decisions in terms of who has access to what information.
Protect the information once it’s recorded. Involve your IT department in establishing appropriate internal data security, and ensure that anybody with access has signed a nondisclosure agreement.
2) Customize your NDAs
Many companies use a standard boilerplate nondisclosure agreement (NDA). This can be a mistake, since a standard NDA may unwittingly give away some rights. To avoid compromising your security, consult with an attorney to custom-tailor an NDA.
Take into consideration factors like when trade secrets must be returned and/or destroyed – particularly when the relationship with the arrangement with this business partner ends. Does the agreement have an “expiry date” after which the partner is allowed to use your trade secrets? This is never advisable, yet it’s often part of standard NDA agreements.
3) Communicate with employees
Many employees don’t have a clear sense of what an essential asset trade secrets are. Employees who will be dealing with a trust business partner must understand what can and cannot be exchanged.
Clarity is key here. Unambiguous written guidelines will probably work best, along with a clear indication of who to turn to with any questions relating to information shared with the business partner. This isn’t a “once and done” process. Retraining every few months will ensure that they understand that protecting trade secrets is an ongoing concern for every single employee.
4) Communicate with business partners’ employees
The relationship of trust with your business partner extends to every single employee coming in contact with your trade secrets. Therefore, your business partner’s staff must also ensure that they understand their requirements and obligations under the conditions of any NDA that they’ve signed.
Signing the document isn’t enough. If they see that you will be vigilant about enforcing your trade secret rights, and that you’re checking in periodically to see how your information is being used at your business partner’s end, they will take your concerns more seriously.
5) If secrets do get out...
It happens. Sometimes from within your company, and sometimes through a business partner; sometimes accidentally, and sometimes intentionally. Whatever the case, you absolutely must have a Plan B ready in case trade secret information does get out. Move to enforce your rights as soon as you become aware of the breach. And once the situation is back under control, take a step back to evaluate lessons learned and to enhance security going forward.
The most essential thing to know about trade secrets is that they’re only protected by law if you’ve taken reasonable steps to keep them secret. Vigilance up-front and on a systematic, ongoing basis will demonstrate to employees and business partners that you are very serious when it comes to protecting your intellectual property rights. Following these five simple rules now will go a long way towards preventing bigger problems later on down the line.
Image credit
Although there’s an element of risk in bringing anybody on board, here are five simple ways you can mitigate your risk, working proactively to keep your trade secrets as safe as possible.
1) Clearly define your secrets
Unlike patents, trade secrets don’t have to be formally registered, but creating an internal list of trade secrets you control will make things very clear for employees and business partners and help them understand what can be shared. Once you’ve created this list, you’ll be able to make decisions in terms of who has access to what information.
Protect the information once it’s recorded. Involve your IT department in establishing appropriate internal data security, and ensure that anybody with access has signed a nondisclosure agreement.
2) Customize your NDAs
Many companies use a standard boilerplate nondisclosure agreement (NDA). This can be a mistake, since a standard NDA may unwittingly give away some rights. To avoid compromising your security, consult with an attorney to custom-tailor an NDA.
Take into consideration factors like when trade secrets must be returned and/or destroyed – particularly when the relationship with the arrangement with this business partner ends. Does the agreement have an “expiry date” after which the partner is allowed to use your trade secrets? This is never advisable, yet it’s often part of standard NDA agreements.
3) Communicate with employees
Many employees don’t have a clear sense of what an essential asset trade secrets are. Employees who will be dealing with a trust business partner must understand what can and cannot be exchanged.
Clarity is key here. Unambiguous written guidelines will probably work best, along with a clear indication of who to turn to with any questions relating to information shared with the business partner. This isn’t a “once and done” process. Retraining every few months will ensure that they understand that protecting trade secrets is an ongoing concern for every single employee.
4) Communicate with business partners’ employees
The relationship of trust with your business partner extends to every single employee coming in contact with your trade secrets. Therefore, your business partner’s staff must also ensure that they understand their requirements and obligations under the conditions of any NDA that they’ve signed.
Signing the document isn’t enough. If they see that you will be vigilant about enforcing your trade secret rights, and that you’re checking in periodically to see how your information is being used at your business partner’s end, they will take your concerns more seriously.
5) If secrets do get out...
It happens. Sometimes from within your company, and sometimes through a business partner; sometimes accidentally, and sometimes intentionally. Whatever the case, you absolutely must have a Plan B ready in case trade secret information does get out. Move to enforce your rights as soon as you become aware of the breach. And once the situation is back under control, take a step back to evaluate lessons learned and to enhance security going forward.
The most essential thing to know about trade secrets is that they’re only protected by law if you’ve taken reasonable steps to keep them secret. Vigilance up-front and on a systematic, ongoing basis will demonstrate to employees and business partners that you are very serious when it comes to protecting your intellectual property rights. Following these five simple rules now will go a long way towards preventing bigger problems later on down the line.
Image credit