A legal checklist for what a trade secrets protection plan should include

It’s axiomatic that without steps implemented to protect it, a trade secret has no value. Using lessons learned from the courts, Epstein and Levi in lay out steps trade secret owners should take to audit their protection plan. (First reported by Jon Cavicchi of UNH.)

1. Put the company's trade secrets policy in writing: Simply stated, “it is easier to persuade a court that the company viewed its security procedures as a primary concern if security policies are reduced to writing.”
2. Inform employees not only of the policy but of the trade secrets: “If an employee is unaware that he or she has access to a trade secret, the employee may have little legal obligation to maintain secrecy.” The authors warn not to overextend here.  An employee who thinks all of the information is secret is unlikely to take seriously efforts to protect any of it.
3. Remind employees of the trade secrets, the policy, and their obligations under the policy on a periodic basis.
4. Have employees sign an agreement “acknowledging that (i) they have access to trade secret information; (ii) the company is sufficiently protecting that information; (iii) they will not, and have not, disclosed or misappropriated that information; and (iv) they will report to the company all unauthorized disclosures or uses of the trade secret information.”
5. Conduct exit interviews with employees leaving the company, reminding exiting employees of their obligations.
6. Restrict access to trade secrets, including putting locks on relevant gates and cabinets.
7. Monitor employees who have access to trade secrets.
8. Develop and closely maintain a computer secrecy policy.
9. Restrict plant tours to locations away from materials determined to be trade secrets.
10. Pre-approve employee speeches and publications, paying particularly close attention to trade shows.
11. Notify “prospective buyers, licensees, joint venturers, or other third parties” of the existence of trade secrets and require signed non-disclosure agreements.
12. Implement a periodic review of the trade secret assets and the plan to protect them.

The courts will reward companies that make a good effort to keep their trade secrets secret. Analysts can use this valuable legal checklist to make sure the asset is on a good valuation footing.