Protecting trade secrets is essential for maintaining a competitive edge. Trade secrets refer to essential business information with significant value that must be safeguarded.
The Economist Intelligence Unit says trade secret theft worldwide costs companies an estimated $1.7 trillion annually. So, protecting sensitive corporate information is something all businesses should take seriously.
If you need help protecting your company’s trade secrets, it makes sense to retain the services of someone providing that service to businesses.
Consider these eight things businesses should know about trade secrets.
1. Definition of a Trade Secret
It’s important to understand the definition of a trade secret if you’re going to safeguard it. A trade secret refers to confidential business information that affords a company a competitive advantage.
Formulas, designs, customer lists, recipes, pricing information, research data, and methods are examples of possible trade secrets. You’ll want to consider the protection trade secrets afford, and that’s one reason it makes sense to speak to an expert on such matters, so you know how to proceed and what steps to take to ensure absolute privacy.
2. Legal Protection Doesn’t Require Registration
Another thing to know about trade secrets is that you can get legal protection without registering your trade secrets.
That’s unlike patents that must be registered with the appropriate government agency to obtain the required legal protection. Businesses with trade secrets must shoulder responsibility for maintaining secrecy so sensitive information isn’t disclosed.
3. Must Be Kept Confidential
It’s worth repeating that businesses are responsible for safeguarding their trade secrets. They can do this through strategies like password protection, confidentiality or non-disclosure agreements, and any other means deemed necessary. The more sensitive the trade secrets, the more effort businesses must expend to ensure the information isn’t leaked or stolen.
Consulting with a trade secret expert can help your business take whatever steps are needed to ensure your trade secret isn’t disclosed. All it takes is one slip-up for a trade secret to become an open secret.
4. Duration of Protection
There’s no expiration date when it comes to trade secrets. They can remain in place for as long as your business successfully safeguards the information. A prime example of this is Coca-Cola. It’s managed to keep the formula for its popular soda a secret for north of 130 years.
5. Misappropriation is Illegal
It goes without saying that there are severe legal consequences attached to fraudulently acquiring, sharing, or using trade secrets belonging to other parties. Improperly using trade secrets could result in lawsuits under regulations like the Defend Trade Secrets Act.
6. Enforcement Requires Proof
If your business believes it’s the victim of trade secret theft, you must first demonstrate that the information was indeed a secret, had economic worth, and was misused by someone else.
7. Employees & Business Partners Can Be a Risk
You must be wary about who has access to the trade secrets. Workers and business partners can be a risk factor. That’s one reason to ensure any top-secret information is shared on a need-to-know basis and that non-disclosure and confidentiality pacts are used.
8. Reverse Engineering is Generally Legal
If someone figures out your trade secrets using reverse engineering, you’ll be out of luck. So, you won’t have the legal grounds to sue if someone figures out the various components of your products. The only exception is if the person doing the reverse engineering doesn’t use misappropriated information as part of the process.
These are some things businesses should understand about trade secrets. Knowing what they are, how they work, and why they’re worth protecting will help your business to safeguard vital information.
Source: Cosmo Politian
