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How do I protect trade secrets?

On Behalf of | Jan 30, 2025 | Business Litigation |

A trade secret is a type of intellectual property comprising formulas, practices, processes, designs, instruments, patterns, or compilations of information that provide a business advantage over competitors who do not know or use it. Unlike patents, trade secrets are not registered with any government entity, making their protection reliant on secrecy.

To maintain the confidentiality of trade secrets, businesses and individuals must implement strategic measures, often including:

  • Non-disclosure agreements (NDAs): Have workers, especially high ranking employees, sign NDAs to legally bind them to keep the trade secret confidential.
  • Access controls: Limit access to trade secrets to only those who need to know, using physical and digital security measures.
  • Employee training: Regularly train employees on the importance of protecting trade secrets and the protocols in place to ensure their security.

By employing these methods, businesses can significantly reduce the risk of trade secret theft and help better ensure that their competitive edge remains intact.

What are examples of trade secret theft?

Despite best efforts, trade secret violations do occur. A disgruntled or departing employee may take confidential information to a new employer or start their own competing business. Another common example occurs when hackers target businesses to obtain sensitive information for financial gain or competitive advantage.

Understanding these potential threats can help businesses better prepare and protect their trade secrets.

What should we do if a competitor steals our trade secrets?

It is important to gather evidence and assess the extent of the breach. It is generally wise to seek advice on legal remedies, including filing a lawsuit for misappropriation. These steps can help mitigate the damage caused by trade secret theft and protect a company’s interests.

It is important to note that there is a time limit that applies to bringing these claims. The courts generally allow a trade secret claim to move forward within three years of discovery of the theft, also known as trade secret misappropriation. The question of when the clock starts is one that courts debate, and it is wise to seek legal counsel experienced in this area of the law to review your claim and provide guidance.

Protecting trade secrets is not just about safeguarding information — it is about preserving a company’s unique market position and future success. By understanding what constitutes a trade secret, implementing robust protection measures, and knowing how to respond to potential violations, businesses and individuals can effectively shield their most valuable assets.