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How to Protect Your Company’s Trade Secrets

Mon Feb 14th, 2022 by  Trade Secrets

Companies doing business in the United States can protect most types of intellectual property through registration with the U.S. Patent and Trademark Office (USPTO) or the U.S. Copyright Office. But, there is one major exception: Trade secrets are not eligible for registration. Instead, companies must protect their trade secrets through other means, as Alabama intellectual property lawyer Hunter Adams explains below.

Trade Secrets Derive Their Value from Confidentiality

Trademarks derive value through public recognition. Copyrights derive value through publication; and, in order to secure patent protection, companies must disclose their inventions through the registration process. Trade secrets, however, derive their value from confidentiality.

This is a critical distinction. Not only can disclosure of trade secrets diminish their commercial value, but disclosure can also lead to loss of exclusivity. As a result, protecting trade secrets involves putting safeguards in place to make sure they do not become publicly known.

Steps Companies Can (and Should) Take to Protect Their Trade Secrets

What does this mean in practice? Here are five examples of steps companies can (and should) take to protect their trade secrets:

1. Identifying the Company’s Trade Secrets

The first step toward protecting a company’s trade secrets involves identifying the assets that need protection. While this may seem straightforward, it is often easier said than done. Companies need to have a clear understanding of which assets qualify as trade secrets—and which need to be protected through patent or copyright registration.

2. Prioritizing Cybersecurity

Cybersecurity breaches present the main threats to many companies’ trade secrets. With this in mind, companies need to make cybersecurity a priority. Companies should adopt cybersecurity programs that are appropriately tailored to their networks and that address their specific risks.

3. Implementing Physical Controls

In addition to fending off network intrusions, companies that own trade secrets need to prevent unauthorized physical access as well. Here too, companies’ needs will vary, and they will range from keeping laptops and hardcopy files behind locked doors to implementing keycard access and hiring security guards.

4. Utilizing Employment Contracts and Internal Policies and Procedures

Companies need to take appropriate steps to ensure that their employees do not inadvertently (or intentionally) disclose their trade secrets to unauthorized third parties. In most cases, this will involve both requiring employees to sign confidentiality agreements and implementing confidentiality-oriented internal policies and procedures.

5. Including Appropriate Protections in Third-Party Agreements

Finally, when disclosure to third parties is necessary, it is critical that companies impose appropriate contractual protections. Beyond simply requiring third parties to maintain confidentiality, this may involve requiring third parties to maintain cybersecurity and physical security controls that are at least as strong as those maintained by the company.

Schedule a Free Consultation with an Alabama Intellectual Property Lawyer

Do you have questions about what your company should be doing to protect its trade secrets? If so, Alabama intellectual property lawyer Hunter Adams can help. Please call  251-289-9787 or contact us online to arrange a free initial 30-minute consultation. Our offices are conveniently located in Mobile, New Orleans, Huntsville, and Birmingham