Here at MKT Law, we’ve been handling a number of trade secret cases
lately where a former employee, or soon-to-be former employee, has taken
trade secrets from our clients’ businesses for their own personal
gain. There is no way to protect your intellectual property completely
– there’s nothing in this world you can 100% safeguard from
others – and make it so no one can ever take it from you and give
it to a competitor, use it themselves, or even try to hold it hostage
for a ransom. But that doesn’t mean all your ideas, plans, technologies,
developments, business intelligence and the security for your future as
an ongoing concern are out there unprotected, but your trade secrets are
always vulnerable and need concrete actions to keep them safe. There
are a few common sense things you can do to increase the odds of your trade
secrets not falling prey to unauthorized disclosure, theft or misappropriation.
Here’s 5 things you can do to protect your valuable intellectual
property, business’ confidential information and trade secrets:
- Non-disclosure agreements: Whenever you hire someone you must put it in writing and enforce your rights
to maintain business secrets and confidentiality. It should be right there
in the initial contracts for employees, subcontractors, strategic partners
or anyone else who may become privy to protectable information. Using
confidentiality and nondisclosure agreements (with proprietary rights
reservations) and non-solicitation and non-compete agreements are essential
for top-tier employees. But you should have your sales reps, techs, office
managers, and all others with access to company trade secrets sign these
types of agreement
before they are hired and as a condition of their employment with you. If they didn’t
at the start of their employment, contact MKT Law before asking any current
employees to sign one now so we can help you make sure the agreements
are valid and sufficiently protect you.. - Training and documentation: Your company must train employees on trade secret issues, too, so they
understand the importance of confidentiality because the law looks to
the things you did to protect your trade secrets yourself before the Court
will protect them, too. You also can’t be hesitant to strictly enforce
any breaches of confidentiality/trade secret protocol, and be thorough
with how you keep relevant documentation filed away, including completed
training records, acknowledgement sheets in every employees’ personnel
file and records of actions taken when your protocols were not followed. - Loose lips really do sink ships: They are only secrets if you keep them secret. The law requires you to
make reasonable and ample efforts to keep your trade secrets out of the
common knowledge. If you go around telling people about them, or make
them easily available, you will not be protected by the law or in court.
Restrict access to key information, use secured access areas (electronic
and physical) with sign in/out logs, require that passwords be secure,
complex, and changed frequently, and mark confidential information as
CONFIDENTIAL. Don’t stop there, though. Make every effort to protect your prized
possessions. You can use video monitoring cameras in key areas of your
office, encrypt electronic data, establish sufficient backup protections,
create on- and offsite copies of critical documents, and set rules for
offsite computer use and data access by employees. Any visitors to your
office or workplace should be checked in/out, sign an acknowledgement
form that says they are obligated to keep any information they may see
confidential, always designate an employee to accompany them while visiting
onsite, and enforce restrictions on offsite data and file usage. - When protections fail: Have a Trade Secret Emergency Response Plan (TSERP, if you like acronyms)
ready in case an inadvertent disclosure is ever made. You should have
form emails and phone scripts at the ready for a quick response and for
contacting anyone who was privy to the inadvertent disclosure. Be ready
with forms for the person or people to sign that obtained the information
due to the inadvertent disclosure that acknowledges the return of the
data or its destruction (whichever is appropriate), emphasizing its secrecy
and the accidental nature of the disclosure, and requests to keep it secret
and not disclose it further. You may have to show a court later on what
you did to maintain secrecy and protection of your intellectual property
despite the inadvertent disclosure in order for it to remain protected
as a trade secret under the law. - On the way out: Create strict guidelines and rules for employees that quit or are terminated
now before the next person leaves your business or company. Exit interviews
are a great way to reaffirm that they understand the nondisclosure and
non-compete agreements you had them sign before their employment began.
You may want to try to learn where the employee is going to be working
next, have them sign-off on another declaration of confidentiality, swear
to honor it, and not take any info or data with them. As soon as it is
reasonable, terminate entirely the employee’s access to physically
and electronically accessible data that is sensitive, change all accessible/known
passwords immediately, and, in particular, secure and inventory all paper
files and electronic data the employee had accessed or could access; don’t
forget to check log files and copy card usage, voice mails and email accounts,
If they had a company cellphone, go over the records that may show that
there has been information leaked or evidence that the employee may have
been transferring confidential company data offsite in the last few months
before their departure. When it comes time for them to leave and “never
return”, make sure the employee leaves the building with an escort
and none of your data.
Even with the best laid plans and preparations, someone can pull the wool
over your eyes and take some of your intellectual property without warning.
Don’t get frustrated if this happens. As previously mentioned, it
can happen to anyone. Instead,
contact MKT Law for help. With foresight and planning, you can increase the protection
of your company’s trade secrets (and value) and be more likely that
a court will do the same if you fall victim to misappropriation of one
of you business’ most valuable assets. Call
612-260-5109 today for more information.