6 Secrets to Protecting Trade Secrets

Every successful business has its trade secret – it could be a secret ingredient, drink, special sauce, invention, or device that gives the company a unique advantage over its competitors. To ensure continued business success, this information should remain a mystery to the rest of the world.

For example, KFC, an American fast-food chain best known for its fried chicken, has its top-secret herb and spice mix that the company has securely locked in a vault. For many years, KFC’s secret recipe blend has been guarded to keep their fried chicken business on top of others.

What is a trade secret and how is it protected?

According to the United States Patent and Trademark Office (USPTO), three (3) standards must be met for information to be legally considered a trade secret:

• has either actual or potential independent economic value by not being generally known
• has value to others who cannot access the information legitimately
• reasonable measures are taken to protect its secrecy

Maintaining the secrecy of trade secrets and keeping them out of their competitors’ reach is crucial for the business’ competitive edge.

The Defend Trade Secrets Act (DTSA) requires trade secret owners to take reasonable measures in safeguarding their “crown jewel.”

Below are 6 ways to protect your trade secrets:

1. Non-disclosure agreement (NDA)
   A legally binding agreement between two (2) parties to prevent the disclosure of a company’s intellectual property or sensitive information regarding its products or services for a specific period.

2. Non-compete agreement (NCA)
   A contract preventing employees from competing against a business for a certain time after their employment ends.

3. Cybersecurity protocols
   Putting robust cybersecurity policies and practices in place protects business trade secrets from theft by hackers, competitors, and departing employees.
   Companies must implement strong password policies and network access restrictions to protect confidential information from outside threats.

4. Restricting access
   Controlling access to sensitive information and limiting it to just a few people lessen the risk of trade secret theft.

5. Physical protection
   Secure and protect the places where confidential business activities are conducted, like laboratories and plants.

6. Training employees
   Train your employees on trade secret protection practices and the policies they must keep in mind to secure confidential information.

Famous examples of trade secrets

• Google’s search algorithm
• Coca-Cola’s formula for its world-known drink
• WD-40’s multi-use product formula
• Listerine’s secret formula
• Krispy Kreme Doughnuts recipe
• McDonald’s Big Mac special sauce

Don’t miss our upcoming webinar:

Protecting Trade Secrets and Company Assets with Non-Compete Agreements

Tuesday, February 21, 2023 from 3:00 pm to 4:30 pm (ET)