Keeping trade secrets private

As Texas company owners may know, trade secrets are not only the domain of businesses with special recipes to protect. Trade secrets may encompass a wide variety of information, methods or contacts that might serve to help a business be successful and outdistance its competitors. Keeping trade secrets private requires much more than average business practices.

The Uniform Trade Secrets Act provides legal protection to prevent usurpation of trade secrets. To qualify for protection, a business owner must take steps that show he or she is actively involved in protecting business information. This may be accomplished by taking several preemptive measures.

Employees leaving the business and moving on to a competitor are one of the most common ways that trade secrets are lost. Making certain employees know that this is not acceptable is done by educating them and the judicious use of non-competition agreements. While most such agreements are limited to employees with access to important information, structuring a viable non-compete agreement makes it clear that this information remains the property of the company when the employee leaves. It is essential to structure the agreement with an eye toward state regulations governing enforcement capability so that the non-compete might be defended in the event it is challenged.

On occasion, such as when a merger, buyout or other transaction is pending, businesses may need to reveal proprietary information to another business. Asking for a nondisclosure agreement before revealing salient information makes it less likely another company will use it for its own purposes. If the company refuses to endorse a written declaration, sending an email stating that proprietary information is involved may provide some protection.

An attorney may assist a business in structuring a comprehensive non-competition agreement. Further, the attorney may litigate against the use of misappropriated proprietary information in court.

Source:, “How to Protect Your Trade Secrets“, December 29, 2014

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