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Jennifer Baljko

Guide to Protecting Trade Secrets

Make sure the recipe for your secret sauce doesn't slip into the wrong hands

By Jennifer Baljko, Freelance Writer and Editor

For successful products, there's something that makes them different from the competitors'. Whatever it is, it makes the product stand out, and company officials try to guard that trade secret from leaving their hands. Generally, a trade secret involves a formula, pattern, compilation, program, device, method, technique, or process that:
  1. Derives economic value from not being known to the public, and
  2. Requires steps to maintain its secrecy.

Of course, preventing information from being leaked requires thoughtful planning. Here's what you need to know to protect your "secret sauce."



Action Steps
The best contacts and resources to help you get it done


Examine trade secret status

There are legal, economic and administrative differences between patents, intellectual property, trade secrets and trademarks. You'll have to evaluate and analyze what you have in your entire "information" portfolio, decide which data will earn a trade secret label and which information may be better protected by other means.
I recommend: Free Advice, Kilpatrick Stockton LLP and Ten3 Business e-Coach have tips for sorting through these distinctions.

Go the NDA route

Let employees, contractors and vendors know about the nature of the information you are sharing with them and have them sign non-disclosure agreements that contractually prohibit them from releasing information. Create guidelines on how information is handled and shared.
I recommend: Nolo has information about nondisclosure agreements, what elements should be included in an NDA as well as books, CDs and e-books on the topic.

Use the law to your advantage

The federal Uniform Trade Secrets Act and state laws that may protect your company if trade secrets enter the public domain or fall into the hands of your competitor. Brush up on trade secret legalities and what examine your rights.
I recommend: The George L. Graziadio School of Business & Management at Pepperdine University has a good legal overview, as does IPWatchdog.com.

Watch for damage from employee turnover

Employees who are terminated or take jobs at a competing firm pose a big risk in trade secret exposure. Things like exit interviews and a checklist of items that need to be returned before employment ends help curb the risk.
I recommend: Fenwick & West LLP has a white paper listing appropriate measures for handling employee departures and preventing trade secrets from leaving your organization.

Tips & Tactics
Helpful advice for making the most of this Guide

  • Besides products, trade secrets laws also can protect your customer and supplier lists, consumer profiles, sales methods and advertising strategies.
  • Either because of changing market conditions, short product lifecycles or other circumstances, information will eventually enter the public domain and trade secrets no longer may carry the same weight of secrecy.

The official source of Protecting Trade Secrets is the Trade Secret Law page at Business.com

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Recommended Solution Providers

LegalZoom: Trademark Registration
Register your trademark online.

MyCorporation: Trademark Registration
Protect your trademark through registration. From Intuit, the makers of QuickBooks accounting software.

Trademark Express: Trademark Registration Services
Provides trademark protection services.

Trademark Company: Trademark Protection
Focuses on trademark protection services, including research, applications, and monitoring.

Best Sites to Learn More

Nolo: Trade Secrets Resource Center
Nolo provides law books, forms, and software covering a wide range of personal and business law. This is their area dedicated to trade secrets and non-disclosure agreements.

AllBusiness: Intellectual Property
This AllBusiness page provides links to information on how to protect your business ideas with patents, trademarks, and copyrights, as well as how to navigate the U.S Patent and Trademark Office.

FindLaw: Intellectual Property Law
Offers links to web content related to intellectual property law, including copyrights, patents, trade secrets, and trademarks.

About: Trade Secrets
This About guide offers articles and advice on trade secrets from a patent and trademark perspective, including both basic and advanced information.

U.S. Patent and Trademark Office: Trademark Registration Requirements
Provides information on trademark registration.

RegisteringATrademark: Trademark Law Basics
Explains the basics of trademark law.

Best Blogs and Forums

IntelPropLaw: Trademark Forum
Discuss trademark issues with others.

Phosita: Intellectual Property Law Blog
This blog covers intellectual property legal issues, including patent, copyright, and trademark law.



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