5 Key Questions to Ask to Protect Your Company’s Trade Secrets

1. What is the status of your trade secrets?

Trade secrets come in many forms, and a proper assessment of your company’s assets in this area will ensure that you are current regarding the number, kind, and value of the company’s trade secrets. Some examples of possible trade secrets that you will want to review include: your company’s proprietary lists, such as customer lists and source material supplier lists; the manufacturing or production processes employed; training methods; research methods; and details of operational systems either in use or being tested.

2. What protects your trade secrets?

Once you have a complete picture of the trade secrets possessed by your company, it is critical to properly safeguard these secrets. This is not only to protect them from theft, but to also to demonstrate, should the need arise, that appropriate measures were taken to guard these assets. In the event of a formal dispute about any theft of trade secrets from the company, a court will want proof that the company took logical steps to guard those secrets and that these assets were not left unprotected, vulnerable to attack or to misappropriation. As each company’s set of trade secrets is unique, a trade secret protection system should be tailored specifically for the company it is meant to protect, and that system should also be modified as the company goes through changes affecting its trade secrets.

3. Whose trade secrets are they?

Another critical question to ask in the process of assessing and protecting your company’s trade secrets is “to whom do they belong?” While the full roster of trade secrets known to you may be employed in your company’s processes, there is a possibility that the true owner of those trade secrets is not in fact the company. Your company may have developed into its current incarnation as a result of mergers, acquisitions, selloffs, dissolutions, and other combinations. Trade secrets used by the company may in fact belong to smaller companies that played a role in your company’s history. It is therefore critical that each of the trade secrets used by your company can be traced to a transaction in which it was lawfully acquired.

4. Does employee behavior pose a risk for a dispute?

Part of trade secrets management is protecting these assets from theft. But another part is protecting your company from disputes created by employees who misappropriate trade secrets from parties other than your company. For example, your company may deal with other organizations and individuals who provide services as vendors, suppliers, brokers, or outsourced labor. Each of these trade partners likely has its own set of trade secrets, and you must ensure that agents for your company are not—either by accident or intentionally—employing those secrets in the processes conducted by your company without express permission from the secret’s owner. To prevent costly litigation, it is important to know how to detect any trade secret misappropriation conducted by your company’s employees. Similarly, it is key to appropriately inform them of the nature of trade secrets, lest they mistakenly use another’s trade secrets in a way which is unlawful.

5. What is your response plan in the event of an attack on your company’s trade secrets?

The first thing to have in place is a response team, with your trade secrets lawyer being one of its key members. Second, you will need to consider the likely ways in which a breach could occur, and what measures you will take in the event that such a breach actually happens. Your trade secrets counsel can prepare, in advance, by identifying which forms of legal action will be most appropriate and effective for the various types of breaches your company must protect against. State law and federal law each offer their own unique set of remedies, and one may be more effective than the other. That attorney should also consider ways to resolve a breach by means other than litigation, such as through alternative dispute resolution, mediation, or negotiation.

The attorneys at Castaybert PLLC are skilled in the areas of contract formation and analysis, and also with the intellectual property management issues discussed above. Please contact Andre Castaybert at acastaybert@nullac-counsel.com to get more information about how you can protect your company’s trade secrets.