Protection of trade secrets is an issue that should be at the forefront of every company, regardless of the nature of the products or services offered, and regardless of the state of the economy. An economic downturn, during which we might expect increased employee mobility (and, perhaps mobility without request, as in involuntary termination), and the particular concerns of a technology company (that its intellectual property is all it has) make this a critical issue.

First, let's define our terms. A "trade secret" has been defined as "any formula, pattern, device or compilation of information used in a business, which gives the owner an opportunity to obtain an advantage over competitors who do not know or use it." As a result, a trade secret includes not only a "formula" (one of the most famous might be that used to make Coca-Cola), but also sales and product information, customer lists, and marketing plans. Virtually every business, regardless of how high or low tech, has trade secrets (I actually cannot think of any business that does not!).

And the stakes are high. If your company's success has been founded on its ability to make high-tech micro widgets using a special process that is able to make the widgets faster and better than the competition, and a disgruntled ex-employee provides this information to your major competitor in the high-tech micro-widget market, you might as well kiss your company good bye.

Thankfully for that wonderful thing called the Law (and your friendly, helpful lawyer), all is not lost. While you generally cannot, without placing a person in physical restraints and monitoring their behavior 24/7, prevent such a breach of company confidentiality, there are many things you can do to make such a breach less likely (we call this "proactive deterrence"). While not fool proof (unfortunately nothing is - the application of the law is an art and not a science), it certainly beats sitting back and waiting for the sky to fall in.

First, let's start with the worst-case scenario and work our way backwards. The Economic Espionage Act, enacted several years ago, makes theft of trade secrets a federal crime (punishable by incarceration). That's scary stuff.

Then we have our "Trade Secret Protection Program" - something in which every company should consider investing. Several steps involved with such a program:

1. Identify your trade secrets. 

2. Institute Clear Rules to Protect Confidentiality. 

3. Educate, Educate, Educate (did I say Educate?). 

4. Implement Security Systems. 

5. Put Agreements in Place 

6. Institute Consistent Post-Employment Procedures.

Of course, behind each of the items enumerated above, there are several additional "checklists" of items with which you should comply to ensure maximum protection from your program. Seek the advice of your lawyer in helping you put a program in place that is tailored to the needs of your business. If it helps you sleep at night, the investment you make in your trade secret protection program is more than worth it!

"This article is prepared by Miller & Mitchell, P.C. We do not recommend acting on the information contained in this article without obtaining specific professional advice. These articles focus on broadly applicable legal principles. Contact Miller & Mitchell, P.C. for legal counsel."

For more information on e-policy and other workplace issues, contact Miller & Mitchell, P.C. cmiller@millermitchell.com

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