If a fashion retailer, manufacturer or designer loses its trade secrets, the results can be devastating. Even with all the security measures companies may have in place to avoid a security breach, it’s a potential problem they still face. For example, several Nike designers who quit their jobs were recently suspected of taking the company’s trade secrets and revealing them to Adidas, their new employer. The scheme was eventually discovered by Nike and ended in an out-of-court settlement.
A fashion company’s trade secret consists of information that pertains to their product’s uniqueness and exclusiveness. Particularly, the trade secrets can be linked to the company’s cost data, manufacturing and design procedures, supplier and consumer lists and private marketing strategies, for instance.
To prepare for a possible breach of trade secrets, companies should rigorously execute the necessary procedures to protect their confidential information. This action may prove helpful in the event the company’s trade secrets are compromised and the company decides to seek protection in court.
Besides implementing an official written statement reflecting the company’s trade secret policies, the company should regularly explain the policy during training sessions and when employees are initially hired. The company should also require any employee who is privy to its confidential information to sign a non-disclosure agreement. Any third party who is acquainted with the company’s trade secret policies should agree to sign a non-disclosure agreement as well.
Company owners who feel that their trade secrets have been misappropriated may want to obtain the advice of an attorney who has intellectual property experience. Legal counsel can describe the protection and remedies that are provided by the Texas Uniform Trade Secrets Act.
Source: Apparel EDGL, “Don’t Let Your Competitor Wear it Better: Protect Your Fashion Trade Secrets”, David Zalman, Sept. 15, 2015