A common and real concern for startups and small businesses is balancing the business realities of building a sustainable enterprise with the necessary but sometimes difficult costs of registering your intellectual property, specifically your trademark and patents. However, there is one type of intellectual property that requires no registration. Therefore there are little to no additional costs.
Trade secret protection is often overlooked but it is a very useful way to keep your most valuable information safe and away from competitors. Unlike trademarks, patents and copyrights which protect specifically limited types of creative works and discoveries, trade secret protection is much broader.
Like the name implies, trade secrets covers almost all kinds of confidential business information that can lend your business an advantage of some sort. Thus, it can cover a wide gamut of information, such as customer contact information, manufacturing techniques and associated know-how, internal pricing information, and even formulas for products, such as the formula for Coca-Cola.
These are just a small fraction of the type of information that can be protected by trade secrets, and it demonstrates how flexible trade secret protection is. In fact, trade secret protection can cover nearly any sort of secret information that you have created or compiled that is important to your business.
Another advantage of trade secret protection is that it does not need to be registered or any other procedures. In order to receive trade secret protection the only requirements are:
- That the information must be a trade secret (it has business or commercial value and is not generally known by the public)
- The trade secret holder took reasonable steps to protect the secret.
Furthermore, to establish a misappropriation of trade secret claim, the trade secret holder must show that the information was wrongfully acquired.
For most businesses then, the requirement that it took reasonable steps to protect the secrets is often the most important and something that it can integrate into its daily practices. Examples of reasonable steps to protect trade secrets include:
- Limiting access to the information internally to only the employees that need to access the information (For example, if the trade secret is customer contact information, limiting access to only salespeople and anyone else who need to use the information
- Requiring employees to sign a log when accessing your trade secrets
- Having clearly defined requirements, such as in employee handbooks or contracts, about protecting access to the trade secret information and the company’s ownership of the information
- Regularly reminding employees and contractors of their duty to protect your trade secrets. This includes using the exit interview as an opportunity to remind employees leaving your company of their continued duty to not disclose your trade secrets.
These and many other reasonable steps you can take to protect your trade secrets are procedures that can be integrated into your best practices, keeping your costs low and proprietary information secure.