Remember that kids’ song “This Little Light of Mine?” The one that discouraged us from hiding our “light” under a bushel in favor of letting it “shine?” That’s great advice for how children should display their talents for all the world to see. But it’s not the way to go if you’re an adult whose business relies on intellectual property (IP) like trade secrets.
This may be the least secure way to store your company's trade secrets.
What Is a Trade Secret?
“Trade secrets” is kind of a catch-all term to describe the types of IP that cannot be copyrighted, trademarked, or patented but that provides a business with a competitive advantage. Examples may include a secret cake recipe with the baker’s unique combination of ingredients, a confidential chemical formula for a specific type of plastic, or a proprietary rating process for financial investments.
Patents and trademarks can be registered with the U.S. Patent and Trademark Office, while copyrights can be recorded by the U.S. Copyright Office. But there is no federal oversight designed specifically for trade secrets – which makes sense, because if there were, they wouldn’t be “secret” anymore.
Protecting Trade Secrets and Other IP
This begs the question: What can a business owner do to keep his or her trade secrets protected from outside scrutiny? Here are several steps which can be taken:
1. Clearly stake your ownership claim. Don’t assume that any IP which is developed by your employees or contractors is automatically yours. Use employee contracts which plainly specify that the rights to any IP and trade secrets created by those under your employment belong to you.
2. Restrict access to those who absolutely need it. Don’t store these trade secrets in an unprotected file on your company intranet. Be careful when distributing login credentials to the server or network where the trade secrets are stored, and always make sure this access information is stored in the company’s name and not in someone’s personal account. And consider keeping hard copies of the trade secret in a locked vault or safe deposit box.
3. Implement NDAs. Use Non-disclosure agreements (NDAs) with all employees and contractors. This will provide legal protection for your company if an employee or contractor does shares your trade secrets. So make sure that everyone who receives a check from your company signs an NDA, You need to be safe, and make sure all employees and outside consultants understand what information it pertains to, and realizes the consequences of violating the agreement.
4. Minimize the odds of accidental release. Since mistakes can happen, it’s up to you to prevent your trade secrets from being shared unintentionally. In addition to establishing procedures regarding the secure handling of the IP, you should educate employees about potential problems like emailing screenshots with login credentials displayed or posting proprietary information on social media.
5. Address leaks immediately. If your trade secrets are somehow compromised, you can take steps to diminish the resulting fallout (like making sure the IP doesn’t get shared with people in other countries). Contact your attorney to see what remedies are available to you and your company.
Once your business’ trade secrets are revealed to the world, it’s very difficult to put the genie back in the bottle. That’s why it’s essential to do everything you can to protect your company’s trade secrets and keep all of your IP to yourself.
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This article was originally published as Protecting Your Intellectual Property Is More Important than Ever on www.succeedasyourownboss.com