Practical Tips for Protecting Valuable Information
Most businesses, whether they contain manufacturing operations or provide services to their customers, have information which the businesses consider valuable and which give the businesses a competitive advantage over their competitors. This information may be a chemical formula, manufacturing process or confidential business or financial information. Taking the right steps to keep this information secret is an important part of maintaining and growing a successful business.
The following factors are used to determine whether certain information is protectable as a trade secret or confidential information:
- the extent to which the information is known outside the business;
- the extent to which it is known by employees and others involved in the business;
- the extent of measures taken by the business to guard the secrecy of the information;
- the value of the information to the business and to its competitors;
- the amount of effort or money expended by the business in developing the information; and
- the ease or difficulty with which the information could be properly acquired and duplicated by others.
In order to keep information secret, we recommend the following steps:
- identify sensitive proprietary information;
- limit access to the information to those individuals who need to know it;
- educate those individuals on the importance of keeping secret information confidential;
- if the secret information must be shared with other businesses or governmental agencies, only disclose the confidential information after a confidentiality agreement is signed or practices maintaining confidentiality set forth in a statute (such as Pennsylvania's Amended Right to Know Law) are followed;
- if the information is stored in electronic format, use appropriate password protection and consider implementing policies under which individuals cannot download the confidential information from the business computer on to their home desktop computer or personal date assistant such as a Blackberry, iPhone or flash drive;
- adopt, implement and enforce appropriate policies for retaining and destroying confidential information when it is no longer needed;
- put copyright notices on all drawings, product specifications and material that are provided to vendors and third parties and consider a "click-wrap" notice for electronic data and applications where the computer user must read the confidentiality obligations and click "I agree" before being given access to the information; and
- prepare covenants not to compete for those individuals having access to the confidential information.
For advice or assistance regarding this issue, please contact Attorney Tom Pendleton or call us at 814-870-7600.