Successful businesses have their “secret sauce” that helps them thrive. If they want to remain profitable, they must keep those secrets out of the hands of competitors.
Numerous laws in the U.S. allow businesses to protect intellectual property. However, some businesses may not always know what they can label as a trade secret.
Under the Uniform Trade Secrets Act (UTSA), a trade secret is any intangible asset that provides economic value to a business and is not known by its competitors. Some examples of trade secrets include:
- Formulas: A mathematical rule that helps increase quality or output.
- Patterns: A formation that makes a product look or function better.
- Compilations: Combining unique and separate items that help make up the product.
- Programs: Software that makes a product better to use.
- Devices: Adapting something to help it function for a particular purpose.
- Methods: A particular procedure that helps increase quality or production.
- Techniques: A specialized way of carrying out a particular task.
- Processes: Actions business take that help them complete goals.
If companies want to label anything they have as intellectual property, they must take the proper courses of action to keep things confidential. Specifically, they must demonstrate that if their competitors learn the secret, it could cause the business substantial harm. The business can lower its chances of damage by setting up physical or contractual barriers. For instance, if Ben & Jerry’s comes up with a new process for making its ice cream, they may want to shield factory tourists and some workers from knowing that secret. Doing so can help keep this information away from its biggest rivals and former employees who work for their rivals.
Protecting trade secrets
While taking extra precautions may hinder productivity in the short-term, businesses would be wise to be better safe than sorry, as the old adage goes. Keeping vital information under wraps is critical for businesses to protect their assets. Taking several precautions is a prudent approach to protection, such as these:
- Identify IP that needs protection: If a device or technique the business uses isn’t typical industry protocol, they should apply to get IP protection.
- Track storage of confidential data: If businesses worry that their information or processes could get leaked to a competitor, they may want to conduct an audit. Doing so can allow the company to see who has access to what and determine whether they need to have access to such data or not.
- Require vendors to sign contracts: Depending on the company, some utilize third-party vendors or independent contractors to conduct business operations. Sometimes, vendors may need access to confidential information to perform their jobs. If that’s the case, companies must have their vendors sign a nondisclosure agreement (NDA) or another type of confidentiality contract before they start working.
It’s still possible to keep things confidential
Even though IP theft is common these days, businesses can protect their most vital information by getting the right trade secret protections. Whether it’s through patents, copyrights or trademarks, a knowledgeable intellectual property attorney can address questions or concerns businesses have.