Intellectual Property: Protecting Your Trade Secrets

Most MOSOs don’t think of their companies as having intellectual property.  In their mind, intellectual property is reserved for those billion dollar technology companies like Google and Apple.  But thinking like that is not only incorrect, but could be costly.

Many MOSOs have valuable intellectual property called “trade secrets” within their business.  A trade secret is generally defined as information that (1) has economic value, (2) is not generally known, (3) is not readily ascertainable, and (4) is the subject of efforts to maintain their secrecy.  In plain English, that means it is a competitive asset of your business that you keep secret.  This can include recipes, formulas, techniques, customer lists, data, plans, and many other sorts of information.  Famous examples of trade secrets include Coca-Cola’s secret formula and Kentucky Fried Chicken’s 11 herbs and spices.

Some advantages of trade secrets are that they can be kept secret forever, there is no requirement for registration, they help build mystique, and many states have special laws for their protection.  However, if you don’t protect your trade secrets, the law will not protect them for you.  And far too often business owners neglect their trade secrets until it is too late.  A knowledgeable MOSO should be proactive and take the following steps to protect their trade secrets:

(1) identify the trade secrets that drive your business,

(2) keep access to the trade secrets on a need to know basis,

(3) make those who are trusted with trade secrets sign confidentiality agreements,

(4) educate employees as to what information is and isn’t okay to disclose to others, and

(5) make sure employees return information containing trade secrets upon termination and are made aware of their confidentiality obligations.   

If you do all this, you might just find that your company is a hotbed for intellectual property.

Fuel Your Aspirations!

John Monahon,
is an attorney with Trusted Counsel (Ashley), LLC,
a boutique corporate and technology law firm. 
You can find him on the web at www.trusted-counsel.com