The vast majority of businesses possess information they would like to keep away from competitors. Whether it comes in the form of an essential formula or a marketing strategy, this information has value as long as it is kept secret. What many are surprised to learn is that to protect a trade secret in the court system, you first must do something that may seem obvious: attempt to defend it.
Below, we examine an essential part of the definition of a trade secret – reasonable efforts to maintain secrecy.
Where does this requirement come from?
The Pennsylvania Uniform Trade Secrets Act (PUTSA) defines a trade secret as information that:
- Derives independent economic value from not being generally known
- Is subject to reasonable efforts to maintain its secrecy
The second part of this definition leads many companies to question: “What efforts are considered reasonable?” The answer depends mainly on the facts of an individual case, but a few efforts stand out as generally effective.
Common “reasonable efforts” to maintain secrecy
Implementing the right procedures to protect trade secrets depends on the type of information a company seeks to protect. But, these steps are an excellent place to start:
- Create a written policy informing employees on how to identify and protect trade secrets
- Mark documents containing trade secrets or confidential information to alert readers of content and consequences of disclosure
- Limit the number of people within the company with access to the trade secret
- Physically restrict access to trade secret documents
- Use separate password requirements and encryption for trade secrets stored on computers
- Use confidentiality agreements when sharing trade secrets with a third party
It is important to remember that most threats to trade secrets come from inside a company, rather than from external bad actors. To learn what strategies are best suited to your business, consult with an attorney experienced in trade secret protection.
