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Create a policy to protect your trade secrets

Many businesses thrive because of the trade secrets they own. These trade secrets, if stolen by an unscrupulous employee, could be used to compete unfairly with the business -- and affect its bottom line. A such, business owners should create a policy to protect their trade secrets.

When creating a trade secret protection policy, you'll want to cover the following areas:

  • Inform everyone who sees your trade secrets that they are secret. Let your customers, partners, employees and suppliers know that the information they're seeing is confidential. Request these parties to agree that they will not share your secrets or use them against you without your permission in writing. Have these parties -- including your customers and employees -- sign a confidentiality or "nondisclosure" agreement.
  • Physically secure your trade secrets. Use "No Trespassing" signs, put up fences, lock the exits and entrances. Hire a security guard if required to protect your secrets.
  • Regularly change your computer passwords. Safeguard your digital information by regularly changing your passwords and require the use of passwords that are difficult to guess.
  • Before a terminated employee leaves, remove his or her digital and physical access to trade secrets. Request the return of sensitive information and remind them of their nondisclosure agreements as well.

With a good trade secret policy, California companies can avoid a lot of lawsuits that arise relating to intellectual property. However, if someone does steal proprietary information from you, legal avenues may be available to assist you and your company to seek financial compensation relating to the harm or damage that the theft of your trade secrets caused.

Source: Entrepreneur, "Trade Secrets," accessed Nov. 24, 2017

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