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HomeBusinessHow to Keep Your Trade Secrets Secure

How to Keep Your Trade Secrets Secure


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A trade secret is a piece of information that is kept secret by its owner and derives independent economic value from its secrecy. Trade secrets include a wide array of information, with individual parts of information not publicly known. For example, the formula for Coca-Cola is a trade secret, with very few employees aware of the recipe.

Common types of trade secrets include technical information, like manufacturing guides, designs or digital diagrams, or commercial information, like marketing or advertising plans. They provide businesses with a competitive edge. Protecting and securing these trade secrets to avoid financial loss is paramount in keeping your competitive edge intact.

Related: Practical Guidance on Protecting Trade Secrets While Working Remotely

Reasonable steps of protection

You don’t need to register a trade secret for it to be protected. There is no official mechanism to register a trade secret at all. To get trade secret protection, you need to take reasonable steps to protect the information at stake.

Coined by the World Intellectual Property Organization, the phrase “reasonable steps of protection” describes the steps a owner can take to protect their trade secrets. Although it may sound vague, protecting trade secrets through “reasonable steps” is fairly simple. This is especially helpful considering today’s work climate of on-site, remote and hybrid office models.

Within an office setting, traditional protections, like non-disclosure agreements (), are important. Other reasonable measures include: implementing password protection on devices containing trade secrets and locking cabinets that hold paper documents with proprietary information.

Leaders of remote teams can enforce policies that ensure data security, such as secure and private internet connections or providing employees with a virtual private network.

Password-protected communication platforms can also help to keep trade secrets confidential. For example, password-protected Zoom meeting rooms or communicating over secure Slack channels can help keep important data protected. If employees use digital written documents, files should be labeled so that employees know whether those documents can be printed and shared, or if they are for internal use only.

Exit interviews are an opportunity to enforce trade secret protection and to remind employees leaving the company of the NDA they signed upon hire. Many companies require exiting employees to sign a document upon termination to confirm they returned all company confidential information and that they will abide by their obligations concerning such information.

These protections not only secure your trade secrets but can also communicate the significance of the protection to your employees.

Related: Data Protection for Small Business

Benefits of trade secret protection

Trade secret protection is a key component of protecting your business’s intellectual property. Whether your trade secrets include formulas, programs, methods or systems and processes, protection is one critical way to safeguard your business’s intellectual property.

There is a myriad of advantages to trade secret protection. The process is typically low in cost and immediate with no associated fees. By taking the steps to secure data, you are ensuring that your trade secrets are perpetually protected.

It is important to note, however, that trade secret protection demands vigilance on the part of the information’s owner. Appropriate steps to ensure the protection of your business’s confidential information provide a contingency plan if that data is improperly disclosed.

Misappropriation and ramifications

So, what happens when employees disclose secret information? The key is misappropriation. Misappropriation occurs when someone improperly discloses trade secrets, whether by mistake or with malice.

While suing an employee might be the last step a business leader wants to take, enforcing legal action and suing for misappropriation can be vital for business owners. This is because it can be difficult later on to show that you took reasonable steps to maintain the secrecy of the trade secrets in question.

Misappropriation is punishable by law both in the United States and abroad.

Both state law and federal law provide trade secret owners the right to sue others that misappropriate trade secrets. Remedies usually include damages and an injunction to prohibit further use of trade secrets. Federal law (and some states) also may allow a trade secret owner to recover attorney fees in filing a lawsuit.

There are more draconian remedies available, particularly under federal law. The U.S. Defend Trade Secret Act, under extreme circumstances, allows a trade secret owner to have a U.S. Marshall go into a misappropriator’s residence or business and physically remove devices that contain trade secrets.

What happens if a business owner, who owns the trade secrets, discloses protected information to anyone who hasn’t signed an NDA or who doesn’t have other safeguards in place? That valuable trade secret protection may simply disappear, and the trade secrets will become public domain. If a trade secret owner does not use reasonable means to protect the secrecy of trade secrets, it will be difficult to prove the value of the information.

Related: The One Question All Businesses Must Ask About Protecting Trade Secrets

The bottom line

Protecting trade secrets is an important step to maintaining your business’s competitive edge. Utilizing the services of experienced counsel can help eliminate any issues regarding trade secret protection or disclosure.



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