By: Jeffrey G. Sheldon, Esq.
A trade secret by definition needs to be secret. Of course absolutely secrecy is not required. Use of a trade secret usually means more than one person knows the secret.
Whether or not there is adequate steps taken to have secrecy usually arises in a lawsuit against someone, often an ex-employee, for misappropriating the trade secret. Ex-employees have been known to inappropriately use customer lists, sales data, future business plans, and technical information.
If it is ever necessary to prove that certain information is a trade secret, it is necessary to show what efforts were made to maintain secrecy.
Examples of what the courts look for are:
- Policy manual warning employees of the need to keep information secret
- Documents are labeled as “confidential”
- Access to trade secrets are on a need-to-know basis
- Employee contracts include a trade secret protection clause
- Exit interviews with departing employees warning them of trade secret obligations and confirm in writing
- Facility access is limited and all visitors and vendors are “badged.”
- Non-publication of research and development
- Use of non-disclosure agreements
- Shredding of documents containing trade secrets
Whether or not there is:
- Employee information program where employees are warned of secrecy requirement
- Trade secret protection clauses in agreements with outside consultants
- Careful control of access to computers containing trade secrets
So if you have information that is valuable and you wish to maintain as a trade secret, implement as many of these procedures as feasible.