Trade Secret Law Compliance Guide
An interactive guide to protecting your company's valuable trade secrets.
What is a Trade Secret?
Under the U.S. Defend Trade Secrets Act (DTSA), a trade secret is information that:
- The owner has taken reasonable measures to keep secret; and
- Derives independent economic value, actual or potential, from not being generally known or readily ascertainable by others who can obtain economic value from its disclosure or use.
Key Elements Explained:
Information: This is defined very broadly. It can include formulas, patterns, compilations, programs, devices, methods, techniques, or processes. Examples include the formula for Coca-Cola, Google's search algorithm, or a unique customer list.
Reasonable Measures: You must actively protect the information. This isn't a passive right. Measures can include non-disclosure agreements (NDAs), password protection, physical security, and clear policies for employees.
Economic Value: The information must give your business a competitive advantage because it's secret. If everyone knows it, it has no value as a trade secret.
Compliance Self-Audit Checklist
Use this checklist to assess your current trade secret protection measures. Your answers will be used to generate a personalized report.
Key Best Practices
1. Identify and Document
You can't protect what you don't know you have. Regularly audit your business to identify information that qualifies as a trade secret. Maintain a secure inventory or register of this information.
2. Implement Robust Security Measures
- Digital Security: Use strong passwords, encryption, firewalls, and access controls. Limit access to sensitive information on a "need-to-know" basis.
- Physical Security: Secure physical documents and prototypes in locked cabinets or rooms. Implement visitor logs and restrict access to sensitive areas.
3. Use Contracts and Agreements
- NDAs: Use non-disclosure agreements with employees, contractors, and business partners before sharing any sensitive information.
- Employee Agreements: Include confidentiality clauses in employment contracts. Clearly state that all work product belongs to the company.
4. Train Your Employees
Your employees are your first line of defense. Conduct regular training on the importance of confidentiality and your company's specific policies for protecting trade secrets. Implement clear onboarding and offboarding procedures to manage access to information.
My Compliance Report
Your report will appear here after you complete the checklist on Tab 2 and click "Generate Report".