Trade secrets can’t be protected if your company makes certain mistakes. While that might seem obvious, it’s not uncommon for businesses to make mistakes that cost them valuable trade secrets. So, it’s vital to know what missteps can lead to the forfeiture of trade secrets.
Keep reading to see five ways businesses lose trade secrets and how to avoid these errors.
1. Lack of Internal Safeguards
A common reason businesses lose trade secrets is that they have either insufficient or zero internal security protocols. Your business can’t expect to safeguard trade secrets if there’s no real effort to protect them.
If top-secret information isn’t properly identified, tracked, or restricted, this data can be leaked accidentally or stolen purposefully. Whether it’s an accident or on purpose, your company’s trade secret can get into the wrong hands and possibly deal the sort of blow that tanks sales or even threatens the ongoing viability of your business.
Storing proprietary information on shared servers without encryption or password protection is asking for trouble. You need to ensure there are strong internal safeguards to protect trade secrets. It can’t be a piecemeal approach since that’s bound to lead to more problems.
If in doubt, consult a trade secrets consultant for guidance. Learning how to protect confidential information can go a long way toward ensuring your company doesn’t see trade secrets become public knowledge. You can ask the consultant questions, get feedback on the status quo, and learn the best practices needed to keep trade secrets protected.
2. Employee Misconduct or Negligence
Employees are a company’s greatest asset, but they can also be the source of serious problems, whether because of misconduct or negligence. Workers, whether current or previous, are often the cause of leaked trade secrets. Some former employees purposely disclose trade secrets to stick it to their former employers or for personal gain.
Others may leak trade secrets through negligence. But whether purposeful or negligent, leaked trade secrets can deal your business the same measure of harm.For example, compromised personal devices are a common risk, and knowing the signs of a phone hacked device can help employees act quickly to prevent sensitive data from being exposed.You can reduce the risks by ensuring employees understand their responsibilities through regular training and signing non-disclosure or non-compete agreements.
3. Weak Legal Protections and Contracts
Yet another problem that can threaten trade secrets is weak legal protections and contracts. Non-compete clauses, non-disclosure agreements, and confidentiality pacts are vital. But they won’t be worth the paper they’re printed on if not done properly.
One reason it makes sense to hire a trade secret consultant is that they can help you draft legally enforceable agreements that can stand up to challenges.
4. Cybersecurity Breaches
Businesses of all sizes must be mindful of cybersecurity risks since hackers are always on the prowl. That’s one reason to be especially careful about your trade secrets.
Hackers target companies to access trade secrets and other intellectual property that they can then use for their own financial gain. Your business must take cybersecurity seriously to safeguard against cyberattacks that make confidential information vulnerable.
5. Overexposure in Public Settings
Some businesses inadvertently disclose their trade secrets in sales pitches, at industry conferences, or during public presentations.
It’s the sort of thing that can happen accidentally if your company tries to explain its unique value proposition or discuss products or services in more detail than necessary. Your business must ensure that employees with trade secret knowledge know how to avoid sharing too much.
Considering the possible damage that can result if trade secrets are disclosed, your business will want to do what it takes to safeguard them. Speaking to a trade secret consultant with the right experience and expertise is one way to avoid problems.
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