Ryan C. Young | Attorney | Richmond, VA
Trade Secrets are important to every business.
Trade secrets are important to every business, large or small. Should an employee or so-called corporate “spy” decide that your proprietary information will no longer remain secret, your company could suffer severe–possibly, irreparable–damage.
Economic Espionage Act of 1996
This regulation defines trade secrets and offers protection for company owners if –
* They take “reasonable measures” to keep the information secret, and;
* This information delivers economic value from not being known and not “readily ascertainable” through proper means by the public.
This regulation does not conflict with the Freedom of Information Act, as proprietary information is exempt from “mandatory disclosure.” Even the Federal Acquisition Regulation permits the government and contractors to protect trade secrets by contract or agreement.
Protecting Proprietary Information
While companies receive protection against unlawful disclosure of their trade secrets, they must take steps to safeguard this information to access this legal assistance. Many components of an organization’s protection plan are relatively simple, practical and effective.
Non-compete and Proprietary Information Agreements
These agreements prevent a new or current employee from revealing trade secrets to others. They also prohibit employees from using a company’s proprietary information to compete with or generate revenue from their employer’s trade secrets.
The organization’s attorney can create this agreement for a company. The employer should have each employee sign the agreement, keeping the original document in safekeeping, either on- or off-site. In all cases, its contents should remain confidential.
Do not include this important agreement as part of a typical employee handbook or policy manual. It should be a separate document, discussed with employees individually and include clear language evidencing the employee’s agreement .
Safe storage of the information itself
The information the company is protecting should be safely locked away to prevent any unauthorized employee from having access to it. Of particular concern is data resident on company computer systems or servers.
As most companies use electronic systems to store customer data, manufacturing processes and other proprietary information, all sensitive information must be carefully password protected and safeguarded from in-house or outside penetration.
Don’t forget about backups. At least one level, preferably two, of backup information should be kept off-site in a secure location. Whether on disk or other media, or electronically stored on secure servers in the “cloud” or at other locations, company proprietary information backup data must be kept as safe as with in-house computer systems.
Companies should keep all trade secrets away from vendors. If possible, have potential or current vendors sign a non-compete contract. At a minimum, never leave proprietary information in any area open to vendors. Should the company and a vendor agree to a contract for services, the attorney for the organization can include non-compete and unlawful access to trade secrets language in the agreement.
Taking these steps to keep trade secrets confidential and protected should safeguard a company’s important information from unauthorized, unlawful access. Should a computer hacker or employee gain access, companies should immediately contact their attorney for advice and action.
Law Office of Ryan C. Young, PLLC | Richmond, Virginia | Business Law