Have you heard of Merchandise 7X? Perhaps not, though you have definitely heard of the product where Merchandise 7X is one of the ingredients.

 

That's right: Coca-Cola. An ingredient 7X has remained a secret since its invention by John Pemberton in 1886. The written description of it is kept in a vault at the Trust Company Bank in Atlanta, which can be open solely by a resolution from the Coca-Cola Company's Board of Directors. According to the Company's policy, only two people in the company at any moment in time can know the complete formula including the secret ingredient. Their identity is not disclosed and they are not allowed to fly on the same plane.

 

Coca-Cola is probably the most well-known example of trade secret protection, however, trade secrets come in all different types.

 

Formulas, patterns, devices, a compilation of information, technical information used in the manufacturing process, marketing strategies, export and sales strategies, sales funnels, business management routines, software, financial information, business plans, list of key customers, etc. - all that can qualify as a trade secret.

 

According to the legal definition, a trade secret is any information that is:

1) not known to the general public, or to the relevant business circles;

2) confers some sort of economic benefit on its owner derived from the fact of its secrecy;

3) subject of reasonable care and efforts to maintain its secrecy.

 

The main advantages of trade secret protection are that there are neither registration requirements nor registration costs, no need to disclose (like one would have with patents), and no time limit for protection. In other words, from the moment that you have made a list of your key customers and saved it in a password-protected environment, you benefit from trade secret protection.

 

However, the above-provided point 3 of the definition is of paramount importance. There have to be reasonable efforts taken to maintain the actual secrecy of your trade secrets. What does it mean?

 

A good approach would be to introduce a trade secret management policy in the company.

 

It starts with the actual identification of trade secrets. In other words, ask yourself: which information could hurt your company if your competitors would get their hands on it? Then, develop an information security and trade secret policy, addressing both physical and technical, as well as administrative controls. Restrict the physical access, mark the documents with appropriate markings ("no copy", "confidential", "restricted access info", etc), pay attention to computer secrecy and update passwords regularly. What is also essential is to include relevant provisions and restrictions into all of your contracts - internal and external. Finally, and perhaps, most importantly, is to educate your own employees on the importance of trade secrets and measures for their protection, thus transforming every employee into a potential "security officer" in your company.

 

It is not to say that one needs to over-engineer the whole protection process, yet given the inherent fragility of trade secrets, it makes sense to think about your policies and actions in advance.

 

We, at Starks, have extensive experience in designing and implementing trade secret protection strategies both for big corporates and for SMEs. Our expertise and laser-sharp strategic focus are ready to be engaged for your benefit. Reach out to us at info@starks.be and let's see how we can add value to your business.