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Protecting trade secrets in the state of California

Often essential to their winning recipes, California businesses may benefit from understanding what trade secrets are and how they can protect them.

From the formulas used to develop their products and customer lists, to the services they offer or the processes they use, there is often a range of factors that may give California businesses an edge over their competitors. In an effort to cash in or gain economic equal footing, current or former employees and other businesses may seek to access this valuable information. Having an understanding of trade secrets may help business owners protect these intellectual property assets, and thus, their companies’ advantages.

What is a trade secret?

Many different types of information may be considered a trade secret. This includes customer lists, software, recipes and formulas, processes, techniques and other information that gives companies an edge over their competition. Provided that the value of this information lies in its being unknown to others in the market or publicly and companies take reasonable efforts to maintain its secrecy, trade secrets are protected from misappropriation or theft. Thus, should others take or use this information without express permission from the owner, they may be subject to civil or criminal legal actions.

How are trade secrets safeguarded?

Unlike some other types of intellectual property, which have legal protections, the onus of safeguarding and maintaining the secrecy of certain trade secrets is on their owners. In addition to having prospective employees and new hires sign confidentiality agreements, business owners may impose a range of other measures to help protect their sensitive information. These may include the following:

· Place warning labels on confidential computer login screens and documents

· Put locks on doors or file cabinets containing sensitive information

· Limit access and require passwords for computers and networks

· Create specific procedures for visitors

· Include a strong trade secret policy in employee handbooks

When employees are terminated or resign, it can be difficult for businesses to ensure they will not take any sensitive information with them. Some of the protective measures they may take upon the departure of a worker or independent contractor to help protect their trade secrets include conducting an exit interview to review the workers’ confidentiality agreements and the included obligations prior to their departure; disabling the employee’s access to voicemail, e-mail, computers and other files; and reviewing the workers’ areas and computers to make sure everything is accounted for and properly archived. Additionally, it is advisable that employers and businesses monitor workers’ e-mail and access logs after they have given their notice. Business owners are recommended not to allow workers in sensitive positions to stay on for any length of time after indicating their intention to quit.

Seeking legal assistance

For California businesses, protecting their intellectual property, including their trade secrets, may be vital in maintaining their success in the market. Therefore, it is essential that owners and operators consider these assets when they are taking stock of their companies’ intellectual property portfolios. Working with an attorney may help people identify their intellectual property and take the appropriate steps to ensure it is protected from theft or misappropriation.