Companies increasingly protect their innovative technology as trade secrets instead of patenting them, which makes sense in many circumstances. For example, patents expire after twenty years, but trade secrets can last forever. However, safeguarding trade secrets presents unique challenges in an increasingly interconnected and data-driven world. While trade secret law only requires “reasonable measures of protection,” protecting trade secrets in practice requires establishing a plan to ensure that your company’s trade secrets are protected now and forever.
Establish a confidentiality plan. Start by creating a plan that defines what confidential information, including trade secrets, your company needs to share and with whom. This plan should outline how the information will be used and the protections for handling it. Limiting disclosure is essential; only disclose what is necessary for a specific business purpose. For example, Coca-Cola’s success in keeping its formula a trade secret stems from highly restrictive disclosure policies. This approach minimizes risk by ensuring that only a few individuals have access to vital information.
Furthermore, consider limiting what information your company accepts from others. Taking on sensitive information from outside sources can limit your company’s ability to develop and monetize similar innovations...
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