Every organization in California, from large corporations to small startups, possesses valuable trade secrets that enhance their business' operations and allow their company to continue. Trade secrets can include everything from supplier lists, customer lists, formulas, recipes and any other idea or information used for operation. Since trade secrets are a valuable business asset, companies should take special action to protect them.

Key steps

First and foremost, businesses should identify what their trade secrets are. Since the definition of a trade secret is so broad, businesses should remember that their trade secrets can include any information, technique, pattern, method or formula that has commercial value. Business should also do the following:

  • Assess risk-Businesses should assess where their trade secrets exist, who might have access to them and determine who might be interested in taking them and using them for their personal or commercial interests.
  • Make protection efforts-Once their trade secrets have been identified and assessed for risk, businesses should take steps to physically protect them. For example, trade secrets kept on paper should be stored in a secure file cabinet. Or, if the trade secrets are electronic, they should be stored in a computer file with limited access.
  • Educate staff-Businesses should make sure their employees understand the importance of their trade secrets and the benefits of protecting them. Employers should also have new employees sign a nondisclosure agreement upon hire. This agreement can be included in the general employment agreement and still be effective.

Businesses should also identify any third parties, besides employees, who might have access to their trade secrets. From there, actions should be taken to protect their interests and prevent the third party from using this information inappropriately.

Establishing existence

Businesses that believe their trade secrets have been improperly used by another party must be able to establish the existence of this information. In most cases, businesses have to prove information, confidentiality and value to ensure the existence of their trade secret. Another important step of providing this is to establish proof that steps were taken to ensure the trade secret's protection and secrecy.

Companies in California that need to establish the validity of their trade secret after having it misused or stolen may struggle to accomplish this goal independently. When this occurs, business owners should reach out to an attorney in their area for assistance with this process and help protecting their trade secrets moving forward.