The tricks of protecting trade secrets
What can you suggest about protecting my company”™s records and files from theft? I have a medium-size business in lower Connecticut and we have methods we own and want to keep secret. If what we do, and how we do things, gets out we lose much of our competitive edge.
Protect company data such as customer lists, blueprints and engineering records, financial information, technical records, sales forecasts, price lists, how you do what you do and other proprietary information and sensitive data. These are all vulnerable to many sources of intrusion. In some cases basic competitive intelligence and market research has resulted in re-formulation, loss of customers or destruction of entire businesses.
Start by identifying what is confidential and who”™s in charge of security. Being clear that your company has trade secrets is the first step to getting conscious about how to limit access. Then put policies and systems in force to protect your proprietary tools.
Non-competes provide some measure of protection with employees. Limiting access to “trade secret” data on a need-to-know basis helps reduce loss exposure. Firewalls and other computer security measures help reduce hacking. Insurance is appropriate in some cases. Legal remedies are often too little, too late, as pursuing damages for something lost is a little like closing the barn door after the horse has gotten away.
You can report suspected thefts of trade secrets, but be prepared to answer some of the following questions. How do you identify what”™s secure? Who is in charge of security? How secure is your facility? How do you limit access to trade secrets? What goes into making your computer system secure? What confidentiality policies limit employee, vendor and customer access? Are documents or systems clearly labeled “Secret” or “Confidential”?
Better safe ”¦
Here are some things you may want to institute with employees. Do background checks on all new employees. Be careful how much you say about the company when interviewing prospective employees. When people leave, do exit interviews and tell them to hand in all company materials, while reminding them that all company materials are private. Make all employees sign confidentiality agreements upon hiring. Specify the level of access each employee will or will not have to confidential documents. Review access annually, as part of an employee review process. In the case of temps, be careful how much they get to see or use.
Make sure all confidential documents are clearly marked confidential. If systems, books, formula, etc. are considered proprietary, don”™t leave them laying around for anyone to examine. Keep them locked away. Get your attorney to draft or review and approve a confidentiality agreement that all employees sign. Have a computer security policy, which specifies levels of access.
Keep an eye on competitors and respect competitive boundaries. Never open your door to illegal acquisition of trade secrets that belong to another company. If you”™re ever approached by someone seeking to sell you another company”™s trade secrets, call the district attorney immediately. Build enough of a relationship with your main competitors so that you can agree to respect each others”™ privacy.
Other preventative actions
You may want to consider cameras and other security tools such as key card access and self-locking doors. Put up signs saying “Authorized Personnel Only” in areas where documents and other secure items are most in use. Think about who has to have access and under what conditions. Try to limit access to essential personnel only. Secure your dumpsters, or at least the ones that could have confidential documents. Shred materials you don”™t want to get around.
Try to keep as much private information as possible off the main company server. Store systems, or portions of systems, on separate computers that have highly restricted access. Require that employees sign in and out of the restricted access computers. Make employees sign items in and out of secure storage, and don”™t let them leave the building.
Make sure your computer support personnel regularly review the security of your computer system. Firewalls, backup systems and virus protection are essential. Assign employees individual computer logons so you and your IT personnel can track and evaluate access, if necessary. Make sure you have backups securely stored off-site, in a place that only people you trust can access.
It may seem like a bore to go through a security assessment of your company. However, this is one of those cases of an ounce of prevention vs. a pound of cure.
Spending time upfront can save you thousands of dollars in damage and may keep you from losing your entire business.
Looking for a good book? Try “Protecting Your Company”™s Intellectual Property: A Practical Guide to Trademarks, Copyrights, Patents & Trade Secrets” by Deborah E. Bouchoux.