LAWCHEK® & Lawsonline™
Personal Legal Sourcebooks
"LAWCHEK® Intellectual Property"

This is not a substitute for legal advice.  An attorney must be consulted.

"This work is protected under the copyright laws of the United States.  No reproduction, use, or disclosure of this work shall be 
permitted without the prior express written authorization of the copyright owner.  Copyright ©1994 - 2013 by LAWCHEK, LTD."

BACK TO QUESTIONS & ANSWERS

What steps should I take to protect my trade secrets?

Protection of a trade secret generally requires "efforts that are reasonable under the circumstances to maintain its secrecy."  Uniform Trade Secrets Act § 1(4)(ii) (1985).  Steps that should be considered to maintain the secrecy of a trade secret include:

            (1) Physical Security.  The trade secret owner should provide physical security to limit access to the trade secret.  Examples of such measures include: locked and/or guarded entrances; a locked location for trade secret documents with access granted based upon a "need-to-know" basis only; physically covering equipment embodying trade secret information when not in use; employee badges coded and policed for varying levels of access; visitor badges limiting access to areas containing trade secrets; a log book for visitors and visitor escorts; a "clean desk" policy which requires removal of secret work in progress during any absences (e.g., lunch, bathroom, overnight and vacation); and the use of passwords in software to limit access and a policy requiring employees to frequently change passwords.

            (2) Document Handling Policy.  The trade secret holder should promulgate and enforce a uniform document handling policy, including: shredding all waste (discarded drawings, plans, specifications, etc.) and destroying all non-paper waste produced from trade secrets; locking copy machines after hours; marking documents "Confidential"; using paper with preprinted proprietary notice for all drawings, specifications and technical reports; requiring management approval to copy a document marked "Confidential" and educating clerical staff to never violate this policy; and establishing an inspection and approval process for all outgoing materials to make certain that no trade secrets are inadvertently disclosed.

            (3) Employee Education.  The trade secret holder should adopt a policy of employee education addressing the importance of trade secrets and identifying trade secret material, and the policy should be reflected in employee handbooks or manuals. 

            (4) Employment Agreements.  Employment agreements should have a nondisclosure of trade secrets clause, and, for particular employees, a noncompetition agreement.

            (5) Nondisclosure Agreements.  Nondisclosure agreements should be used with all outside entities receiving or having access to trade secrets.  Outside entities include vendors, consultants, suppliers, subcontractors, etc.

            (6) Pre-employment Interviews.  Pre-employment interviews with prospective employees can help avoid potential liability.  The pre-employment interview should include:  an oral review of the employment agreement to ensure that the employee understands the relevant trade secret clauses; a statement to the prospective employee that signing the employment agreement is a condition of employment; a statement from the prospective employee that employment will be commenced without disclosure of any previous employer's trade secrets.

            (7)  Employee Termination Procedures.  Finally, appropriate employee termination procedures can prevent trade secrets from leaving with former employees.  An exit interview should always be conducted, no matter how uncomfortable the situation.  Exit interviews should include:  reminding the employee orally and in writing of the continuing nature of the nondisclosure provisions of the employment agreement; identifying and advising the employee of specific trade secrets; and identifying the employee's new employer.

 

 

This is not a substitute for legal advice.  An attorney must be consulted.
Copyright © 2009 by LAWCHEK, LTD.

BACK TO QUESTIONS & ANSWERS

 

 

LAWCHEK® Home Lawsonline™ Home

Please contact us with any questions or comments by e-mail at webmaster@lawchek.net
or by phone at 1-800-529-5121.

Membership Terms & Conditions
Privacy Policy
Disclaimer

This site produced and powered by enlighten technologies, inc.™.
COPYRIGHT ©1994 - 2013 enlighten technologies incorporated™