Certain information can provide your business with an economic advantage over your competitors, especially when you know the information and your competitors do not. Since no one else knows this information, it is a secret that only your business can exploit. Confidential information that provides an economic advantage to those who know it is referred to as a trade secret. It is important for businesses to keep their trade secret information under wraps, so that no one else can learn about it. If they did, your business would lose its advantage in the market.
Your trade secret might be a form of intellectual property – something you figured out during the course of developing your business that really works and drives sales. The information could be a secret recipe, a clever new way of doing business, a new formula or process, secret customer lists, or other information that gives your business an edge over the competition. The good news is that if you have some confidential information that could be a trade secret, you can legally protect this information from being stolen, or misappropriated.
Steps for Protecting Business Trade Secrets
Trade secrets derive all of their value from the fact that very few people know the confidential information. So if you have trade secret information, you need to take steps to ensure the that confidential information remains a secret. A few ways you can protect your business’ trade secret information is by:
- Keeping trade secret information on a need-to-know basis, i.e., limiting employee access to trade secret information.
- Marking all confidential and trade secret documents with appropriate labels, such as “Confidential”, “Trade Secret” or “For Your Eyes Only”.
- Requiring employees to sign employment contracts that have specific clauses about keeping the business’ trade secret information confidential.
- Having all trade secret information kept under lock and key (e.g., physically locked up when not in use, or digitally protected by a username and password combination).
- Only permitting authorized employees to access the trade secret information.
- Utilizing non-disclosure agreements with any employee or third party who has access to the trade secret information.
- Educating employees about the importance of protecting the company’s confidential information, and the consequences of misappropriation.
Misappropriation of Trade Secret Information
Misappropriation of trade secret information is effectively the theft or accidental disclosure of the trade secret information. When an employee, or third party, steals or discloses the trade secret information, it is no longer confidential, and it usually loses its value since everyone now knows the information. But a business owner who has a trade secret misappropriation is not without legal recourse. You can sue over the misappropriation of your business’ trade secret information.
Victims of trade secret misappropriation may have a legal claim under Texas law and federal law. Usually, misappropriation can be enjoined (meaning the party that misappropriated the trade secret can be legally forced by the court to not disclose what they know) and in some cases damages could be awarded (meaning you could be awarded monetary compensation for the misappropriation of your business’ trade secret information).
Need Help With A Trade Secret? Contact A Business Lawyer
Trade secret information can have immense value for a business – value you don’t want to let disappear! If you need help understanding what are your trade secrets and what to do to protect them, or if you are concerned that your trade secret information has been misappropriated, contact an experienced business attorney. For more information, contact the professionals at Walker Law PC today.
John H. Walker