The following is a non-exhaustive checklist of steps that a business might take to protect information it considers to be a trade secret. While these steps will provide a good overview, it is highly recommended that any business consult with an attorney familiar with litigating trade secret matters to develop a robust plan to protect trade secrets that will work for your business.

These steps are not intended as being all-encompassing. In some circumstances they will be insufficient, and in other instances, they may be overkill. These steps are offered as guidance, and there are additional steps a business may consider taking to protect its trade secrets. However, it is hoped that this list will help businesses start a discussion on the topic and implement steps to protect trade secret information that is reasonable for their business and situation.

Determine What Is a Trade Secret

  • Identify the trade secret information
    • Specifically
    • By category
  • Identify where the trade secret information is located
  • Determine who has access to the trade secret information
    • Is the information only accessible internally?
    • Is the information accessible by third parties?
    • How is the information used in the business?
  • Create a document that specifically identifies the trade secrets, where the trade secrets are located and who has access to the trade secrets

Procedures and Policies -- Internal

  • Restrict access to the trade secret information
  • Undertake periodic audits to monitor and evaluate compliance
  • Mark and stamp documents containing trade secret information as “confidential”
  • Educate employees on what information is considered to be a trade secret
  • Devise document handling procedures for documents that contain trade secret information
    • Restrict access to documents containing trade secret information – give them need-to-know access
    • Devise sign-in/sign-out procedures to access documents that contain trade secret information
    • Documents containing trade secret information cannot leave the premises or certain areas of the premises
    • Provide periodic updates about the policies and the fact that compliance is monitored
    • Keep documents containing trade secret information separate from other business documents.
    • Train employees regarding document handling procedures for documents containing trade secret information
    • Implement procedures regarding removal of documents containing trade secret information from the premises
    • Reproduce only a limited number of documents that contain trade secret and confidential information
  • Enter into separate non-disclosure agreements with key employees and employees that have access to trade secret information
    • Ensure that the information that is considered to be a trade secret is separately identified as trade secret information.
  • Implement a procedure for tracking and destroying documents that contain trade secret information
  • Have a company-wide confidentiality policy and require all employees to acknowledge and sign the policy
  • Make sure the employee handbook provides that there is no expectation of privacy for employees
  • Use work for hire/development agreements with employees and independent contractors
  • Have a document retention policy
  • Have an email policy
  • Provide updates about the policies to all employees
  • Make all computers, laptops, tablets and smartphones company-owned
  • Obtain copyrights to protect important written materials and software
  • Obtain patents to protect inventions, business processes and software
  • Monitor compliance with procedures and policies and communicate concerning efforts to monitor compliance

Policies and Procedures – Departing Employees

  • Disable accounts and network access privileges of terminated and departing employees
  • Examine and/or copy employee’s laptop and other devices before departure
  • Conduct exit interviews of all employees
    • Obtain information about new employer
    • Obtain information about new position and responsibilities
    • Remind departing employee of need to inform new employer of non-disclosure agreement and obligations
    • Remind employee of obligations of confidentiality
    • Provide employee with copy of non-disclosure agreement
    • Obtain return of company documents and other company property
    • Have employee acknowledge in writing confidentiality obligations and return of company documents and property
    • Document the exit interview

Physical Security Measures

  • Require employee identification badges or cards where appropriate
  • Install visitor control systems – visitor badges – where appropriate
  • Keep drawers or areas containing confidential information separated and locked
  • Implement policies addressing the use of company information on employee personal devices
  • Implement computer security measures
    • Password protections for different levels of access
      • Require periodic password changes
      • Require multi-character passwords
    • Database/file restrictions
    • Secure laptops
    • Code trade secret data
    • Monitor use of portable storage devices
    • Remove external ports from computers
    • Control access to Internet
    • Forensic examination of departed employee’s computer
    • Copy hard drive of departed employee
    • Install computer surveillance measures/monitor computer use
    • Encrypt trade secret information
    • Appropriate virus and malware protections.
  • Ensure all discarded computer equipment is erased before disposal
  • Shred documents containing trade secret information
  • Establish physical barriers to prevent unauthorized viewing of trade secret processes
  • Post “no-trespassing” and/or “restricted area” signs
  • Institute overall plan physical security precautions
    • Fences
    • Limit number of entrances and exits
    • Use alarms
    • Use self-locking doors
    • Use after-hours security
    • Use secured dumpster

Procedures and Policies – External

  • Devise policy for providing trade secret information provided to third parties
  • Require third parties to sign non-disclosure agreements as a condition of gaining access to trade secret information
    • Ensure that the information that is considered to be a trade secret is separately identified as trade secret information.
  • Use confidentiality/non-disclosure provisions in contracts with third parties
  • Devise a policy for tracking trade secret information provided to third parties.
  • Periodically audit measures third party has in place to protect trade secret information.