Providing Peace Of Mind

CLASSIFIED Protecting Your Corporate Trade Secrets

| Jun 16, 2021 | Firm News

Over the past year, the widespread prevalence of the coronavirus disease has changed life for many. Moreover, COVID-19 has affected the way that many businesses must operate, and in response, many employees are finding themselves working remotely on a regular basis. Companies need to ensure that their confidentiality practices are enforced in a remote setting – not doing so could potentially present a substantial risk.

Businesses often possess valuable information that is best kept protected from prying eyes. Often, a company has a substantial investment in that information, the disclosure of which could irreparably harm the company. This information typically consists of your business’s, and sometimes your clients’ “trade secrets,” and other proprietary information.

A trade secret can be almost anything that gives your business a unique competitive advantage over your competitors. Some common examples include Coca-Cola’s secret formula, McDonald’s Big Mac special sauce ingredients, or Colonel Sanders’ Kentucky Fried Chicken recipe. Proprietary information might include customer lists, vendor lists, marketing and sales plans and forecasts, internal pricing, personnel records, bank accounts, passwords, and client information and documentation. Given the increased risk of inadvertent disclosure in a work-from-home environment, it is now more important than ever for businesses to take proactive steps to protect this information.

An effective way to ensure that information is kept secure is through use of a confidentiality agreement often referred to as a Non-Disclosure Agreement or “NDA.” An NDA is a written contract in which the employee promises to protect the employer’s trade secrets and proprietary information that are disclosed or to which the employee becomes privy during employment. The NDA provides the company with potential legal recourse, including the right to seek a court order to stop further unauthorized disclosure and money damages if the employee wrongfully divulges protected information. A statistical analysis of federal trade secret litigation by the World Intellectual Property Organization showed that confidentiality agreements or NDAs were often the most important factor when courts examined the measures taken by a company to protect their trade secrets. Additional measures that should be considered when protecting your information include: (1) controlling who can access business information; (2) proactively identifying potential risks and taking steps to manage those risks; and (3) training employees on how to handle and store business information.

Every state has established laws to protect trade secrets, many of which, including Illinois, are based on the Uniform Trade Secrets Act. However, as each state has adopted its own laws, it is important for businesses to consult with an attorney to determine their specific rights and take proper steps to protect and preserve their confidential and proprietary information before there is unwanted and potentially costly disclosure. Our experienced corporate and employment attorneys can help ensure your proprietary property is protected. Contact us at 847-242-1777 to set up a free consultation.