Did you know that trade secret theft costs US companies $300 billion annually? That’s plenty of money, and for a good reason: It’s what making you and your company have a competitive advantage over other competitors.
So, what’s a trade secret, anyway? As the name implies it’s a commercially valuable “secret” information that creates a competitive advantage for your business.
It includes the formulas for your products, the ingredients of your cooking, the code blocks of your software, and your innovative company procedures – to name a few.
Unfortunately, trade secrets don’t enjoy the same protection that patents enjoy – perhaps due to the intangible nature of some trade secrets: Trade secret laws allow for your “expressions of ideas” to be protected, whereas patent laws don’t.
Perhaps that is also the same reason trade secret laws is not federally governed.
The impact of such lack of protection causes headaches: A recent study reveals that trade secret theft is mainly committed by employees… and business partners, too. Ouch.
The impact of theft done by an employee or business partner is pretty scary. Here’s one example: In November 2014, Lyft sued their former COO. The reason? He allegedly took their trade secrets to Uber, a direct competitor.
We know that, today, Uber has gained much more publication from the media, as well as investors’ money than Lyft. In Mid 2014, Uber has raised a whopping $1.2 billion and valued at $17 billion – partially thanks to the stolen trade secrets, I assume…
So much for the “we are in it together” slogan.
So, what’s a business owner can do to protect her trade secret?
Kelly / Warner Law, a legal practice specializing in Internet business, suggest you to do the following:
- Sign confidentiality agreements with your employees, partners, and vendors – and make it mandatory.
- Keep your trade secrets locked – literally and figuratively
- Restrict access your digital documents, and keep yourself from giving up too many secrets in them.
- Work and rework your licensing terms if you make software
- Educate your employees about the importance of keeping your confidential information, well, confidential.
- Enforce company guidelines on trade secrets – and make zero exceptions.
- Do a gut-check: Do you actually have a trade secret? Who knows about it? Do you have a policy on how to protect it? Do your employees know how to deal with the company’s trade secrets?
Want more info? This infographic can brief you with more insight into the world of trade secrets:
Takeaway
Trade secrets are your company’s lifeblood. Leaking it will make it difficult for you to survive.
Unfortunately, due to the lack of protections and understanding about the importance of doing so, trade secrets are get stolen, taking competitive advantages off your business.
I’m sure you don’t want to put yourself and your business in such tough situation. For this reason, you should take actions needed in protecting your trade secrets.
When it comes to trade secrets, it’s better to be paranoid than sorry.