Trade secrets are often the life blood of a Software-as-a-Service (SaaS) company. But, you can’t just call something a trade secret, not take active measures to protect that secret, and expect the adequate protection. This post will give you a high level overview of how to protect your trade secrets.
I wrote about what are trade secrets are in my blot post “Intellectual Property for Startups 101”. Here’s a refresher:
What is a Trade Secret?
- Commercial Methods
- Compilation of Information not generally known or reasonably ascertainable by others by which a business can obtain an economic advantage over competitors or customers.
What can a Company Consider to be a Trade Secret?
- Anything that sets you apart, really. Your application code, algorithms, pricing structure, business model, or even the unique setup of your compensation plan can be considered trade secrets.
- Trade secrets are part of what you transfer over as IP when you form a company – from your founders and employees to the company itself. The company should own the trade secrets.
How do I Register Trade Secrets?
- There is no registration of trade secrets.
- The whole point of trade secrets is that they are ‘secret’.
How do I Protect our Trade Secrets?
Recent case law suggests that a company should take “reasonable measures” to protect their trade secrets. If you can show you took reasonable measures, then your claim can hold up in court. Reasonable measures include, but are not limited to:
- Confidentiality Agreements signed with business partners who may be exposed to the trade secrets that clearly outline what may be considered a trade secret.
- Clear “Confidential” markings on sensitive documents.
- Non-Disclosure Agreements with all employees, independent contractors, and vendors that may be exposed to your trade secrets.
- Exist interviews for departing employees with appropriate documentation regarding trade secret protection.
- Internal policies limiting third-party storage, and third party disclosure of trade secrets.
- Password protections for sensitive documents, folders, applications, and information.
Let us Help.
This is a high level overview of how to protect your trade secrets. There are many other nuances, and each companies case may be different.
Kader Law can help you understand what you need to do, guide you through value-added reseller agreements with our Outside General Counsel offering. If you’re interested in connecting, feel free to contact us.
This post is not legal advice, and does not establish any attorney client privilege between Law Office of K.S. Kader, PLLC and you, the reader.