How Small Business Owners Can Identify and Protect their Trade Secrets
A trade secret is more than just the special sauce that makes your small business unique. It is a piece of intellectual property that you should take steps to protect. Legally, a trade secret is defined as any type of information that is able to create profit by remaining outside the general knowledge of competitors in an industry, and is therefore guarded as proprietary information by a business or individual. Trade secret protection can last as long as the information that is being protected does not become public knowledge, so if a business owner has a legitimate secret on their hands, they can legally protect it for as long as they are able to protect the secret.
What counts as a trade secret for small business owners? A trade secret can’t be something that people are already doing. In fact, even if nobody else is doing what you are, if everyone knows about it it’s not a trade secret either. Only if you are able to prove that you have kept something a secret and that because it is a secret it has added value to your business can you take legal steps to protect it.
How can you protect a secret once you have identified it? You can talk to legal counsel who will help you through the processes required to file for trade secret protections. Remember that you are going to need to show that the secret has both added value and has been protected by your business. You should also ensure that you include non-disclosure clauses in employee contracts, and even if you hire temporary or freelance workers, if they come into contact with this knowledge they must sign documents stating they will not divulge or appropriate the information. Really though, as few people as possible should know about your trade secret, and if possible you should try to only divulge parts of it on a need to know basis.
When is a trade secret no longer protected? It’s open season on your secret when a competitor works it out for themselves, as long as they don’t figure it out by clandestine means and really arrived at it on their own, their is nothing you can do. Alternately, if by an accident of your employees or yourself you reveal the secret, you can’t stop people from using it. This is why business owners have to take real precautions to protect their secret or else it probably won’t last long.
Photo Credit to Rennet Stowe on Flickr