Trade secrets are intellectual property (IP) assets. They include designs, instruments, patterns, formulas, and practices. The information is usually highly confidential in commercial terms and not open to the public. Further, it has economic value for the intellectual property rights holder, which means that theft could lead to monetary repercussions. In fact, the value of US intellectual property stands at $5 trillion and the loss is estimated at $250 billion annually, according to an article by the United States Patent and Trademark Office.
Given these figures, firms need to adopt stringent measures to protect sensitive information from cyber attacks. This is also necessary since in 85% of lawsuits, the alleged individual was either an employee or business partner. Further, you do not have “proprietary rights” or exclusive rights over the material. This makes it all the more vital to protect it. Below are a few best practices for just this.
Non-Disclosure Agreements (NDAs)
To maintain secrecy and establish a duty of confidentiality, a non-disclosure agreement should be signed by anyone with access to the information. Consult legal professionals and use a well-drafted agreement to identify the classes of sensitive and non-public information, according to an article by Praxis Legal Solutions. One of the well-known examples of trade secrets is KFC’s “Secret Recipe of 11 Herbs and Spices.” While one company mixes a part of the spice recipe, the other blends the rest. This way neither has the entire recipe details. So it remains a patented secret.
Monitor Your Employees
Businesses tend to leak data for research purposes. For example, Facebook sold personal information from 87 million accounts to Cambridge Analytica, after which Facebook’s share price on the New York Stock Exchange plunged to $159.39, from the earlier $177.01. This is apart from the impact on its reputation and legal consequences.
However, while your competitors are the biggest threat to your secret, you should not overlook the in-house team. They might reveal restricted information for personal gain. A Walmart employee was once found guilty of stealing item prices and trade margins and selling it to a direct competitor. So, make sure to educate your workers about the harsh legal consequences of leaking trade secrets.
Defining what a secret is might not be easy but it is crucial, in case the court is asked to grant an injunction to stop a fraudster from misusing information, according to an article by the World Intellectual Property Organization. This is important since the alleged person must know what they are and aren’t allowed to use. Further, the claimant must be clear about what they own and wish to protect. But try not to be too inclusive, since it might lower the significance of the secrets.
A firm’s ability to prevent secrets from being stolen or eroded is the key factor in ensuring its longevity, since they are more vulnerable than trademarks, according to an article by ScienceDirect. So, supervise the login and log out times and dates, along with the details of the accessed files. Provide cleared devices in case employees are not working from the office. Regular password changes and multi-factor authentication should be made mandatory. Lastly, ensure that everyone has limited access to the computers’ IP address.
Spilling trade secrets is a massive threat to the US economy. However, following these tips can lower the chances of such theft for your business.