By: Jeffrey G. Sheldon, Esq.

9b44c6f8-e265-41e4-bc80-dd97a34e8924A 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.

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