Contact Us Today! (972) 712-1515

"The Blog"

Trade Secrets. 4 Steps To Safeguard Your Competitive Edge

Posted by Darryl V. Pratt | Jul 14, 2019 | 0 Comments

A trade secret is a piece of information which is confidential, can be legally protected, and gives your company a competitive edge. Lots of the most famous examples involve recipes: the formula for Coca Cola, McDonald's Big Mac “secret sauce”, or that Mrs. Field's chocolate chip cookie recipe that caused such a legal stir in the 90s. But you don't need to be a food purveyor or a mega-corporation to have a unique approach that sets you apart from your competition—and if you can legally keep it a secret, you should. 

Here are four steps you can take to keep trade secrets safe:

1. Make a list: The first step in protecting trade secrets is knowing that you have them. Look across your business and think about any types of information you possess that are both confidential and critical to your success. Trade secrets could be product designs, customer lists, marketing plans, sales forecasts, or processes. For software developers, proprietary code obviously needs protection and for restaurants and food stores, it's the secret recipe. Conduct a “trademark audit” to identify the information you have a legal right to keep private and wouldn't want your competitors to find out. 

2. Stake your claim: Once you know what your trade secrets are, it's essential to start treating them like secrets. Stamp or watermark “confidential” on sensitive documents. Get confidentiality and non-disclosure agreements in place with employees and vendors. These will put the people who learn your secrets on notice not to usurp them and lay the basis for a legal claim, if necessary.

3.  Lock it up: Take whatever steps are reasonably available to you to secure your trade secrets from access. Digital files and systems should be encrypted and password protected. Physical files should be kept locked. Establish rules around access to sensitive files. If possible, use a badge system to control access to your facility and posted signs to designate areas where access is controlled.

4.  Train your troops: Many disclosures of trade secrets are inadvertent slips by an employee who simply did not know better. That may make it easier to forgive, but the negative impacts on your business are still there. Prevent this with good training and education for your employees on what your company considers confidential and what employees' obligations are. Back the training up with strong written policies. And when an employee leaves, take steps to shut down their access to your files and systems right away to ensure that your secrets don't leave with them.

Whether your trade secret is a treasured family recipe, a brilliant string of code, or a closely guarded customer list, it won't be a secret for long unless you are careful. Taking the steps above is a great first step toward a solid trade secret strategy. For even further assurances of security, consider retaining counsel for a professional security audit. The Business Law attorneys at Pratt Law Group can be great partners in protecting your trade secrets and your business. Give us a call today at (972) 712-1515 to discuss.

About the Author

Darryl V. Pratt

With over twenty (20) of experience as a dual-licensed Attorney and Certified Public Accountant, Darryl V. Pratt has practiced law in all areas of corporate and business law, non-profit law, estate planning, probate, guardianship, asset protection planning, bankruptcy (Chapters 7, 13 and 11), real estate, and taxation.

Comments

There are no comments for this post. Be the first and Add your Comment below.

Leave a Comment

DISCLAIMER Pratt Law Group, PLLC (PLG) has prepared the material on this web site, for informational purposes only; it does not constitute legal advice. Further, the material on this site does not create, and receipt does not constitute an attorney-client relationship. The information here is not intended to substitute for obtaining legal advice from an attorney. No person should act or rely on any information in this site without seeking the advice of an attorney. Members of the law firm of PLG are licensed to practice in various courts and jurisdictions; attorneys are specifically licensed to practice in state courts that are enumerated on their individual attorney profiles. We also have affiliations in particular cases with attorneys licensed in additional states. PLG does not offer any guarantee of case results. Although we are extremely proud of our excellent track record, past success does not guarantee success in any new or future case or client matter. This web site is considered advertising by the State Bar of Texas under the applicable law and ethical rules. The determination of the need for legal services and the choice of a lawyer are extremely important decisions and should not be based solely upon advertisements or self-proclaimed expertise. Only those attorneys who state they are Board Certified in their profiles on this website are Board Certified. All other attorneys are not Board Certified. Darryl V. Pratt is the attorney responsible for this site. The principal office of PLG is 2591 Dallas Parkway, Suite 505, Frisco, Texas 75034. Please note that the transmission of an e-mail inquiry itself does not create an attorney-client relationship. PLG cannot serve as your counsel in any matter unless you and our firm expressly agree in writing that we serve as your attorney. You should also be aware that the Statute of Limitations (the deadline imposed by law within which you may bring a lawsuit) may have expired or may severely limit the time remaining for you to file any potential claims you may have. Time is of the essence. If you believe you have a possible legal case, it is important that you seek out legal advice as soon as possible.

Menu