Trade secrets consist of any non-public information that provides a competitive advantage while doing business. Proprietary processes, client lists and operational standards can all constitute trade secrets. They are a valuable form of intellectual property that can help a company become and remain competitive. Protecting those trade secrets from infringement by outside parties is key to maintain an existing competitive advantage.
Unlike other forms of intellectual property, trade secrets generally do not undergo a registration process with the federal government. Instead, business leaders may need to use contracts as a way of protecting trade secrets.
Restrictive covenants protect trade secrets
It is common practice for those in leadership positions to sign contracts that include restrictive covenants for the protection of trade secrets. Nondisclosure agreements prevent executives and others with access to trade secrets from sharing that information with outside parties or the general public.
Noncompete agreements limit the ability to take a job with a competitor or to start a competing organization. Nonsolicitation agreements prevent workers from hiring their former co-workers or trying to lure clients and customers away from a business after exiting a role there.
The right terms included in employment contracts can go a long way toward the protection of trade secrets and the reduction of operational risk. The more valuable trade secrets are, the more important thorough contracts become for the long-term sustainability of the organization.
Working with an experienced intellectual property attorney can help business leaders draft contracts that effectively protect critical trade secrets. Strong contracts can deter misconduct and give businesses legal options for holding former employees accountable if they do misuse or release trade secrets despite their better judgement.