How to Protect Your Trade Secrets in California
A trade secret is any information that is unique and valuable to your business and that is not known to the general public. A trade secret is oftentimes a business’s “secret weapon,” the thing that helps it stand apart from the competition and makes its customers choose it.
Five Rules of Trade Secret ProtectionBecause a trade secret can make or break a business, there are state and federal laws expressly meant for protecting businesses against the unauthorized sharing of trade secret information. However, in order for those laws to apply to your California business's trade secrets, there are five rules that you must follow regarding your private information.
1. Your secret must really be a secret.
In order for trade secret protection laws to apply to your business's trade secrets, the information must be information that the general public, or anyone without authorized permission, can not access via legal means. According to California Civil Code, Section 3426.2(d), a trade secret is considered information "not generally known to the public or to other persons who can obtain economic value from its disclosure or use." Furthermore, if you hope to gain the protection of California's trade secret protection laws, you must be careful about whom you share information with and where you post that information. If you are going to do any voluntary sharing of your trade secret information, you must have the recipient sign an appropriate confidentiality agreement in order for that information to remain legally private.
2. Use a warning label.
All trade secret information must be marked "Confidential" in some way, and on each printed page of the document. You may use a rubber stamp to stamp the warning across each page, or you may include the word "Confidential" in the header and footer of each page of the document.
If you want to get more technical with your document, you may consider placing a full-fledged legal warning on the cover page of each trade secret document that outlines the consequences for sharing the information with any unauthorized individuals.
3. Restrict access to your trade secret information.
If every employee of your company had access to your trade secret information, then the information would not be very secret anymore. In order to receive legal protection for your California trade secret information, you must limit access to your trade secret materials on a need-to-know basis. Electronic documents should be password protected, and hard copies should be kept under lock and key. If you destroy any trade secret information, do so via a shredder, or by wiping the information entirely from your system.
4. Have every employee sign a confidentiality agreement.
Whether or not you plan on sharing your trade secret information with every individual you hire, make it a habit of having every new hire sign a confidentiality agreement. When you do decide to share the information with someone or some entity, have them sign a confidentiality agreement as well--even if you already had them sign one upon hire. It is better to cover your bases than to learn that you accidentally shared the information with an employee who was hired before you instated the confidentiality agreement policy.
5. Stick to the rules.
Finally, do not ever waver on any of the rules mentioned above. If you are lax on any of the aforementioned four rules, you may not have grounds to sue for breach of confidentiality should your trade secrets becom
Hire a Pleasanton Business AttorneyAt Garcia & Gurney, ALC, our Pleasanton business lawyers can help you protect your business's greatest assets through the creation of confidentiality agreements, employment contracts, and other procedures designed to safeguard private information. If your business relies on the protection of trade secrets to thrive, contact our Pleasanton business law firm at 925-468-0400 or online to schedule a private consultation today.