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.\u00a0 This was not fatal to the plaintiffs\u2019 cases, but it did have ramifications.\u00a0 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.\u00a0 Access to the trade secrets was not strictly limited to those who needed access to perform their jobs.\u00a0 Those employees who did have access had not signed confidentiality agreements specifically tailored to protect the trade secrets. \u00a0Instead, the plaintiffs relied upon their general business practices, confidentiality clauses in employment agreements and employee handbooks as evidence of the plaintiffs\u2019 reasonable efforts to maintain the secrecy of their trade secrets.<\/p>\n
It seems self-evident that it is easier to protect a secret if you know what you are trying to protect. \u00a0For this reason, it can be a good business practice to create a list of your business\u2019 trade secrets.\u00a0 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.<\/p>\n
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.\u00a0 The answers will likely differ from one trade secret to another.<\/p>\n
Set a time table to periodically update the list.\u00a0 This will make sure that trade secrets developed in the future are protected as well.<\/p>\n
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.\u00a0 What if the trade secret at issue in a lawsuit filed by your business is not on the list?\u00a0 Won\u2019t the defendant argue that is proof that the information at issue is not a trade secret?<\/p>\n
This fear can be addressed by creating the trade secret list in a manner that makes the list privileged.\u00a0 Have the business\u2019 in-house or outside counsel lead the process.\u00a0 Also have all of the employees preparing lists of the trade secrets do so in a memo addressed to the attorney leading the project.\u00a0 The lawyer can then compile the lists in one communication from counsel to the business\u2019 officers\/managers tasked with devising practices for protecting the secrecy of the trade secrets.\u00a0 The lawyer can also state in that communication that it is not meant to be an exclusive list of the business\u2019 trade secrets.<\/p>\n
Let\u2019s also put this fear in perspective.\u00a0 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.\u00a0 Weigh out these two risks.\u00a0 One the one hand, the risk of leaving an open door through which competitors might obtain your trade secrets.\u00a0 On the other hand, the risk that a lawsuit might erupt in the future and \u2013 despite all precautions \u2013 a judge orders you to turn over your trade secret list to the other side.<\/p>\n