Customer list, secret formulas, processes and other information can be your company’s most valuable asset. What makes this information all the more valuable is that it is unique and not known outside of the company. This information is known as a trade secret. Trade secrets are a recognize form of intellectual property that unlike patents, trademarks, and copyrights are currently regulated only by state law. There is no registration process, as that would require sharing the private data.
47 states have adopted the Uniform Trade Secrets Act (UTSA), which allow for civil and criminal remedies for those who improperly obtain trade secrets. Under the UTSA there are three basic components of a trade secret.
1) The information is a secret
2) It gives your company a competitive or economic edge
3) Reasonable steps have been taken to keep the information a secret
Practical examples of trade secrets are recipes, formulas, processes, methods, marketing strategies, and the list goes on and on. With such infinite possibilities the question becomes how do you protect these valuable resources? Below are three ways we recommend protecting your unique and valuable information.
1) Keep The Information Private
It can be tempting to share what works for you with others. Today it seems that everyone is willing to tell, sell, or teach you their “secret formula” on how to improve your business, get rich quick, or fill in your own blank. The fact of the matter is, if you have information that would cause you to lose an economical benefit if it was shared with others it’s best that you keep that information to yourself. This seems like an obvious tip however executing it can be difficult especially when you have employees and work with third party contractors. In this case the key is only communicating with who you have to in order to execute your strategy, develop your product, etc.
2) Use Contracts to Protect Your Assets
When you have to depend on others to execute your strategy or develop a product that you have designed you run the risk of losing your competitive edge. You can lower your risk and maintain trade secret status by using contracts to protect your assets. Although you are unable to keep your information a complete secret, contracts are a reasonable way to keep the information under wraps. Contracts such as nondisclosure and non compete agreements prevent the other party from sharing your information and allows you to seek legal remedies if the agreements are breached.
3) Use A Warning Label
Finally, we strongly suggest that you use a warning label informing those who come in proximity of your secret information that the information is in fact a trade secret and that proceeding could constitute a misappropriation of a trade secret resulting in civil or criminal remedies. This precaution works to deter improper use of the information and prevents the “I didn’t know” defense.”
Every business has some piece of information that puts them ahead of their competition. This information should be protected. Off the Mark Ip Solutions protects this information by consulting with business owners to identify what needs to be protected and developing a plan to keep their trade secrets protected. Schedule Your Complimentary Consultation today.
Off the Mark offers trademark, copyright and trade secret solutions for businesses and entrepreneurs. We keep unauthorized parties off your marks through federal trademark registration, copyright registration and contracts. Schedule Your Complimentary Consultation to learn how we can help your business.