Every business has trade secrets. Your business has sensitive information that requires protection to maintain privacy and confidentiality. Your secrets or proprietary information has economic value for your business. Failing to work with a South Carolina business lawyer to take steps to protect trade secrets from being disclosed or used by exiting employees could result in substantial economic losses and other problems for your company.
What is a Trade Secret?
The first step in protecting a trade secret is to recognize what information constitutes a trade secret. A trade secret is information that is not known outside of your business. Some of them become public knowledge when a company files for copyright, patent, or trademark protection. However, there could be several reasons why you want to keep certain information held within your company. Also, you want to protect information that you may make public at a later time under a trademark, patent, or copyright.
Examples of trade secrets include:
- Programs and apps
Any information you use to conduct business that is privately known within your company and has value can be considered a trade secret.
These are used within your company for a variety of reasons. Therefore, some employees will need to know about the information to perform their jobs. However, these employees may eventually leave. How can you ensure their privacy if an employee leaves the company?
Five steps a business can take to protect trade secrets are:
- Always identify trade secrets within your company. Mark the information as confidential and limit access to the information to an as-needed basis. Various levels of security should be used to control access to them, such as securing hard copies in locked cabinets and rooms, requiring special passwords and badges to access areas where trade secrets are located, and password protect and encrypt files containing a trade secret.
- Know and understand the various laws that govern trade secrets, such as the Uniform Trade Secrets Act, Defend Trade Secrets Act of 2016, South Carolina Uniform Trade Secrets Act, and Economic Espionage Act of 1996.
- Assess risks and vulnerabilities within your business and outside of your business. Develop a plan to address risks and vulnerabilities, such as using higher-level security measures, including biometric locks, encryption, and strong passwords. Train employees on procedures and policies related to trade secrets and quickly undertake disciplinary action of employees who violate the procedures and policies to protect them.
- Require employees to sign nondisclosure agreements (NDAs) and non-compete agreements as part of their employment. Include these statements in your employee handbook. The agreements may not keep an employee from using or stealing trade secrets, but the agreements are legally binding contracts that you can use as the basis of a civil action if the employee breaches the terms of the agreement. The remedies for a breach discourage many employees from violating the terms by stealing or using them.
- Collect all confidential information from an employee when the employee quits or the employment relationship is terminated. Do not forget to collect hard copies of documents, keys, access badges, and electronic equipment in the employee’s possession. Also, immediately revoke the employee’s access to systems and change all logins and passwords confidential information.
Contact a South Carolina Business Attorney for More Information
Well-drafted NDAs and other employment agreements offer a level of protection against theft of trade secrets. A South Carolina business attorney can help you develop confidentiality agreements and other contracts that protect your company’s secrets and other valuable information. Schedule a consult with a member of our team at Willcox, Buyck & Williams, P.A. to learn more today.