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How do businesses protect their trade secrets?

On Behalf of | Oct 21, 2023 | Business Law |

Keeping your trade secrets confidential is likely what gives your business its competitive edge. Therefore, you have every reason to make sure that your sensitive information does not leak out.

While you can register a copyright or trademark with the U.S. government, there is no similar registration available for a trade secret. Different actions are necessary to safeguard this kind of information.

Use an NDA

Non-disclosure agreements are legal contracts that help secure trade secrets. When you engage in discussions or partnerships with external parties, such as vendors, clients or even employees, you may have them sign an NDA beforehand. These agreements legally bind the signatories from disclosing specific information.

By outlining the responsibilities and penalties for breaches, NDAs establish clear expectations for all parties involved. According to CNBC, a third of U.S. businesses use an NDA, so this is not an uncommon protective measure for a company.

Conduct an exit interview

When an employee leaves your company, take the opportunity to engage in a thorough exit interview. During this conversation, discuss the return of any confidential company information, such as documents, access cards or digital files. Confirm that the departing employee understands and agrees to abide by their obligations concerning such information.

This step may take care of any actions needed to protect your information from leaks. It also helps remind an employee of future obligations to keep your trade secrets from the public.

Improve data security

Implementing security measures at your workplace could help prevent both unintentional and purposeful leaks of your trade secrets. You can restrict access to sensitive information only to those who genuinely need it. Additional actions include encrypting digital files, using secure password protocols and multi-factor authentication, and updating and patching software to guard against vulnerabilities.

Protecting your trade secrets requires a multi-faceted approach. In the event you litigate a partner or employee over an unauthorized disclosure, your agreements and on-site security measures may help convince a court that you are serious about guarding your company information.

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