I have worked on multiple theft of trade secrets lawsuits where it is apparent that the plaintiffs never took the time before filing their case to identify their trade secrets.  This was not fatal to the plaintiffs’ cases, but it did have ramifications.  For example, because the plaintiffs never created an inventory list of their trade secrets, they did not have a precise plan in place to protect the trade secrets from disclosure to competitors.  Access to the trade secrets was not strictly limited to those who needed access to perform their jobs.  Those employees who did have access had not signed confidentiality agreements specifically tailored to protect the trade secrets.  Instead, the plaintiffs relied upon their general business practices, confidentiality clauses in employment agreements and employee handbooks as evidence of the plaintiffs’ reasonable efforts to maintain the secrecy of their trade secrets.

It seems self-evident that it is easier to protect a secret if you know what you are trying to protect.  For this reason, it can be a good business practice to create a list of your business’ trade secrets.  To do this, gather the appropriate managers or department heads, make sure they have a clear understanding about what a trade secret is, then work with them to prepare a list of the trade secrets important to your business.

Once you have that list, the next step is to determine how and where the trade secrets are maintained in the company, who has access to the secrets and what should be done to protect the secrecy of the information.  The answers will likely differ from one trade secret to another.

Set a time table to periodically update the list.  This will make sure that trade secrets developed in the future are protected as well.

One concern people raise when this idea is discussed is a fear that the list of trade secrets might become discoverable by an opponent in a future lawsuit.  What if the trade secret at issue in a lawsuit filed by your business is not on the list?  Won’t the defendant argue that is proof that the information at issue is not a trade secret?

This fear can be addressed by creating the trade secret list in a manner that makes the list privileged.  Have the business’ in-house or outside counsel lead the process.  Also have all of the employees preparing lists of the trade secrets do so in a memo addressed to the attorney leading the project.  The lawyer can then compile the lists in one communication from counsel to the business’ officers/managers tasked with devising practices for protecting the secrecy of the trade secrets.  The lawyer can also state in that communication that it is not meant to be an exclusive list of the business’ trade secrets.

Let’s also put this fear in perspective.  The odds are that if a business is not consciously aware of what its trade secrets are, then the business will not take the necessary steps to protect them from disclosure.  Weigh out these two risks.  One the one hand, the risk of leaving an open door through which competitors might obtain your trade secrets.  On the other hand, the risk that a lawsuit might erupt in the future and – despite all precautions – a judge orders you to turn over your trade secret list to the other side.