Trade secrets are crucial as they contain critical business information. Further, a trade secret is a compilation of information, commercial method, and pattern. It also includes instrument, design, process, practice, or formula. The information is secret, and accessing it might be impossible for unauthorized personnel. Businesses can get an economical and competitive advantage because of this information and thus put this information under security. There are key details about trade secrets that your business needs to know.
The Nature of Trade Secrets
The information only remains a trade secret if no one discloses it in detail to the public. It is no longer a trade secret if people can access the information. Therefore, it is wise to protect the information to maintain its commercial value. These secrets are fundamental aspects of the intellectual property portfolio of a company.
Trade Secrets vs. Confidential Information
The information that holds a competitive advantage and is confidential is a trade secret. Trade secrets need special governance as they hold the top perceived advantage. People sometimes use confidential and proprietary information to refer to trade secrets. However, each of these terms has its meaning.
The Law on Trade Secrets
It violates the law if persons outside the company use the information. Each jurisdiction has laws protecting the unauthorized use of trade secrets. That way, the law shields companies from unhealthy or unfair competition. Due to the advancing technology, companies are more prone to misappropriation. Governments in different countries are developing ways to harmonize laws against such crimes. Apart from this, the government encourages companies to disclose their trade secrets. They believe this approach is the right step toward growing job opportunities.
It is excellent if businesses do not only depend on legal protection from the government. They should try and put in place appropriate techniques to protect their assets. The techniques can either be technical measures or administrative. Setting up robust trade secret policies is a reliable administrative measure. When implementing these policies, establish a trade secret. After this, limit the number of people with this information. Companies can prevent employees from sharing trade secrets by educating them. Once your employees know the importance of the secrets, they will adhere to the policies. Further, employees should sign a non-disclosure or confidentiality agreement.
A business can take technical measures that bar physical access to trade secrets. They include security measures to prevent cyber crimes like malware and hacking. You can also prevent cyber threats by storing information in electronic format. Another option is to conduct TSCM services which is a physical examination to ensure that there aren’t any listening devices or bugs. These options are crucial in monitoring access to certain areas of business premises. With these measures in place, employees and hackers will not be able to access this information.
The Subject Matter of Trade Secrets
There is a broad definition of trade secrets. Commercial, industrial, and manufacturing secrets are part of trade secrets as well. People believe that Coca-Cola formula and KFC are distinctive trade secrets. Trade secrets would protect the company from public humiliation if an experiment failed. The contents of trade secrets also encompass individual cases.
Advantages of Trade Secrets
There are no registration costs involving trade secrets. Further, you do not have to register or disclose trade secrets to the government. However, the business will incur costs when setting up legal barriers and administrative measures. Technical measures are also expensive because you have to hire specialists to install cameras. Further, buying the equipment is costly as well. Unlike patents, which can last for two decades, trade secrets have no time limit. Congress may take time before granting a patent, but trade secrets take no time.
Trade Secret Audits
Audits are crucial when handling trade secrets. There is a need for regular audits of a business’s policies that protect trade secrets. For a business to conduct a successful audit, people with certain expertise are vital. They include individuals with experience in legal and technical fields. It is crucial for the findings of audits to be discussed and reported. The information is vital to senior personnel in the organization.
A business can keep its trade secret and still share it. Before a business shares this information, proper management is crucial. Avoid dispersing the secret broadly as well. Businesses can share these secrets with collaboration partners, suppliers, and customers.
