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How to protect a trade secret?

Business strategies, customer data, production processes and much more are an important asset of the company and are valued no less than a trademark or patent. Of course, this is a strength of the company, but at the same time in the hands of a competitor such information can play against the owner.

How to protect valuable information for the company and avoid its leakage, we'll talk later. 

What information can be classified as a trade secret?

There is no clear legal list of information that can be classified as a trade secret. The owner or manager of the enterprise independently determines what information is a trade secret. However, he must take into account that such information must meet certain criteria:

  • confidentiality, ie such information is not easily accessible;
  • has commercial value, ie promotes business development, provides certain advantages over competitors, etc.

Trade secrets include certain knowledge, unpatented production experience, special technologies, etc. However, there is a list of information that cannot be classified as a trade secret. These are, in particular, the documents required for inspections by state inspectors. 

Effective means of protection of trade secrets

Current legislation does not clearly establish ways to protect trade secrets, and therefore each owner of trade secrets determines them independently.

We recommend taking the following measures:

  • Develop and approve regulations on trade secrets.

A trade secret provision is a key tool to protect a trade secret. 

The main points to pay attention to when developing the provision:

- Clearly define the list of information that constitutes a trade secret;

- Identify the persons to whom this provision applies: employees, company owners, etc .;

- Take into account certain nuances, such as: who is considered a person who has been granted access to trade secrets, and what about employees who accidentally became aware of information that constitutes a trade secret, etc .;

- Clearly define what is prohibited to employees regarding trade secrets. "It is forbidden to disclose"… Well, in what ways is it forbidden to disclose, until the end of work at the enterprise or until the end of life?

In addition to non-disclosure, there is a duty do not use trade secrets while engaging in competitive activities. After all, employees can use the "property" of the company, engaging in similar activities on their own in their spare time or after dismissal from the company. At the same time, such actions cannot be called disclosure, and they can bring no less harm.

- Prescribe liability, in particular to provide for fines and damages if any.

  • Protection of information from employees of the enterprise.

The provision on trade secrets can provide for all the main points of regulation of employee behavior related to trade secrets. But acquaintance with the situation is not enough. It is worthwhile for the employee to confirm such acquaintance and undertake to follow what he has read. This requires him to sign a non-disclosure agreement, or to provide for a clause or section in a written non-disclosure agreement.

The obligation not to disclose such secrets may be provided not only during the employment relationship, but also, for example, for five years after their termination.

  • Protection from business partners who may become aware of such information during cooperation.

It is necessary to prescribe certain rules for the protection of trade secrets in the text of the contract concluded with the partner. It is important to clearly identify three main points:

  • which is a trade secret. In order not to list all the information that is considered commercial, you can refer to the provisions on trade secrets and the point that by signing this agreement the party confirms that it has read such provisions;
  • what is forbidden to do with such information and for what period;
  • liability for violations. Prescribe specific liability, such as a fine for any disclosure of a trade secret that has become known to a business partner.
  • Business owners can quarrel, leave the company and become competitors.

People quarrel - business suffers. Therefore, it is advisable to provide for the obligation of non-disclosure and non-use of trade secrets for the participants of the company, for example, in the charter or in the same provision on trade secrets.

If a trade secret has been violated, it is the measures taken that will help to compensate the damage and restore justice for the violation of the right to a trade secret.

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