A trade secret is a business process or formula that is kept completely secret. Unlike other forms of intellectual property, it is not filed with any agency and instead is kept tightly under lock and key. As a business grows, there comes a time when trade secrets must be revealed to certain employees. When this becomes a concern, there are proper measures that should always be taken with each and every individual who may learn something about the trade secret.
Confidentiality Agreement and Trade Secrets
Generally speaking, if you must reveal a trade secret to a third party, you should have an intellectual property attorney prepare an underlying agreement that includes a statement as to what constitutes a trade secret and what the marking requirements are. The agreement should also specify the company’s expectation of confidentiality and the consequences of sharing the secret with any unauthorized person. In a larger company where many employees know specific types of trade secrets, the company will assign a specific department for each secret and give the employees a designated name badge or patch for their uniforms to inform all other respective employees of authorized people.
Marking Requirements for Trade Secrets
A typical marking requirement may be simply “Proprietary material belonging to NAME.” Often it makes sense to purchase a stamp with the appropriate phrase to facilitate the marking. For trade secrets that are intangible and cannot be directly marked, such as a process, consider the following steps:
(1) carefully define the trade secret in the underlying agreement;
(2) mark the physical area where the process is carried out with a restricted access sign; and
(3) institute measures for restricting access to the trade secret, such as a sign-in sheet and access verification check.
For e-mails and other continuing releases of information, place the information in a password locked document and require acknowledgement of the confidentiality agreement before the document may be opened.
Exit Agreements and Trade Secrets
Whenever an employee leaves the company, it is vital to ensure that the confidential information is not taken with him. An exit agreement will remind the employee of the importance of not revealing the information elsewhere and of the continuing consequences should he leak the information. Another requirement could be a waiver signed by the employee that any time the employer is contacted for confirmation, the inquiring agency will be informed of the confidentiality agreement.
Getting Help
If your company has trade secrets that must now be revealed to additional employees, contact an intellectual property attorney about implementing proper trade secret protections.