What is a Trade Secret, How You Protect It + Why You Should Care.

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If you have been following this series you already know that you’ve got to wise up when it comes to who you share your business ish with and what business ish you share.

Now, let’s dig into trade secrets.

What the heck are they + why should you care?

First, let me issue a mild disclaimer…

This post will provide a general explanation of trade secrets. Trade secrets are specifically defined under state law, and since I am licensed in Illinois…I can’t account for all those other states. Sowry.

Now that we have that out of the way…

Generally, a trade secret is anything that gives your company that edge.

(And don’t pretend you don’t know what I mean by edge).

That thing that makes you swoon and say to self…

“Self, you are a bad a*@ motherf@#%$.”

Trade secrets can include:

  • technical or non-technical data
  • formulas
  • patterns
  • compilations
  • programs
  • devices
  • methods
  • techniques
  • drawings
  • processses
  • financial datas
  • list of actual or potential customers or suppliers

You get the gist.

Now, it doesn’t stop there…

You can’t claim that you have a trade secret, but act all willy nilly with who you share it with and how you maintain it.

You’ve got to treat it like a secret.

If you don’t, then you might as well kiss your legal protections good bye.

Some ways to protect your trade secrets are:

  • Limit access to whom you share it with and who can access it;
  • Mark the physical and electronic files as confidential;
  • Protect the electronic files with a password, and only share that password with those people who need to have it;
  • Have a company policy in place that addresses how your certain “trade secret” or confidential files should be handled by those who have access. For example, can they be printed? If they are printed, do you mandate that they are immediately shredded after use?
  • Make sure the employment agreements for your company specifically address employees’ responsibility to return confidential files upon their leave from the company.
  • Lastly, have business partners, potential business partners, interns, and anyone who you share the trade secrets with, sign a non-disclosure agreement.

One of my favorite cases concerning trade secrets is the Sisterlocks Case (for those who may not know, sisterlocks are a form of dreadlocks, and what I happen to have).  It’s pretty darn interesting.

I encourage you to make a list of your company’s trade secrets and think about what protection you have in place for each one.

Up next, we are covering things that you must include in your non-disclosure agreements.

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