- What makes your business better than your competitors?
- What gives your business a competitive advantage?
- What business information would a competitor be willing to purchase from your company?
- What do you know that your competitors do not?
The information you identify could include pricing information, manufacturing processes, development information, training guides, customer lists, or supply sources. For many companies, this information constitutes a trade secret. A trade secret has four characteristics:
- which derives independent economic value,
- is not generally known or readily accessible by proper means by other persons who can obtain economic value from its use, and
- is the subject of efforts reasonable under the circumstances to maintain its secrecy.
Numerous lawsuits for misappropriation of a trade secret have resulted from a similar scenario – an employee e-mails business information from a business computer to his or her personal e-mail account, or downloads the information onto a disk or flash drive. The employee leaves the current company and takes the information to a new employer. With so much at stake, how can you protect your company's valuable trade secrets?
There are many ways to guard trade secrets, from traditional methods of restricting access (such as locking cabinets and offices, and restricting the information on a need to know basis) to high-tech security (like security access cards, and electronic document access management). However, before you can develop a system to protect your trade secrets, you must be able to identify them. A solid record retention policy can be your business' first line of defense in protecting trade secrets.
A record retention policy seems simple enough. In reality, the process of creating a good record retention policy is complex. All of your business' information – both paper and electronically stored information – will be evaluated and categorized. Through this assessment, trade secrets and confidential business information will be identified, along with the individuals with access to the information. Once trade secrets are identified, you can institute protective safeguards.
There are other reasons to implement a good record retention policy, including increased efficiency, being better prepared for litigation, more streamlined regulatory compliance, and increased opportunities for innovation. Once you have defined and located your trade secrets, you will be in a better position to protect them and to leverage their value.