Optima Law Group Blog

Protecting Your Trade Secrets

Although there is federal and state legislation (Defend Trade Secrets Act and the Uniform Trade Secrets Act) in place that allows companies to take action against trade secret misappropriation, a great deal of it is the responsibility of the company and its staff to adopt and vigilantly adhere to business practices that keep trade secret information private.


Here are some steps you can take to effectively lessen the likelihood that your trade secrets will become public knowledge:

1. Identify and determine what information needs protection.

Many business owners do not even realize they have trade secrets that need protecting. Trade secrets can be as simple as information that gives you an edge over your competitor. Things like customer or supplier lists, marketing techniques, etc. are all trade secrets and should be protected.

2. Utilize business procedures that support confidentiality of the company.

Once you figure out the information within your company that needs protection, set up a process to identify and protect such information going forward. This can include practices like stamping, marking, or labeling confidential information in some way to separate it from other information. Minimize the circulation of trade secrets within your company (only on a need to know basis) and keep a log that requires a date, name, and time to be recorded when sensitive information is accessed. Be exclusive with whom you share your trade secrets with outside of the company as well, and if possible, do not reveal the entire picture of your trade secret(s) to third parties, etc. (example: use different vendors for different pieces of the whole, rather than using one entity to execute the entire process and revealing the whole picture).

3. Use Agreements.

In addition to adopting and employing practices that support company confidentiality, use nondisclosure, noncompletion, strong employment agreements and proprietary rights agreements that have clauses that limit an employee’s right to access and use a company’s sensitive information. Be sure to include language in the agreement(s) that outlines the use of trade secrets for not only the period in which the party is employed or contractually obligated to fulfill, but also in the event that the party is terminated or is no longer with the company. From a legal standpoint, using agreements may be the most important step you take in protecting your valuable trade secrets.

4. Take Security Measures.

For physical files, store confidential information in locked file cabinets. Offices should also have an alarm or security system to safeguard information from theft. Keep electronic devices secured at all times (i.e. smart phones, tablets, laptops, computers, etc.). This means minimizing the time that your devices are left unattended and utilizing strong passwords on all devices, including updating them regularly. In addition to using passwords, you can use encrypted folders and most importantly, make sure your internet security is sufficient.

5. Train Employees.

Believe it or not, most trade secret misappropriation cases involve an employee or business partner misusing sensitive information, rather than a computer hack or security breach. With this in mind, it is imperative that employees know how to identify sensitive information and the correct process and handling of such information.


We have shared several ways to help you get started on protecting your valuable assets, granted, it is a continual process that should improve and evolve over time. We would love to facilitate the preservation of your trade secrets by reviewing your confidentiality agreements with you and performing a comprehensive analysis to ensure they are sound and will effectively help protect your business!