Traklight Webinar with Nicole Druckrey on Trade Secrets: You Have Them! Here Is How to Protect Them

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Virtually all businesses have trade secrets (i.e., confidential information that would be valuable to your competitors). This presentation will assist you in identifying your trade secrets and will give you valuable advice on how to protect those secrets so that they do not lose their legal status. We will also discuss what to do if you suspect your trade secrets have been stolen.

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Traklight Webinar with Nicole Druckrey on Trade Secrets: You Have Them! Here Is How to Protect Them

  1. 1. Trade Secrets: You have them! Here is how to protect them. Nicole Druckrey Partner Quarles & Brady LLP Emily Ely Traklight Online Media Specialist Presented by
  2. 2. Nicole J. Druckrey Chair Trade Secrets & Unfair Competition Subgroup Trade Secrets: You have them! Here is how to protect them. 2
  3. 3. Protecting Your Property • A Number of Ways to Protect: – Patents – Trademarks – Trade Secrets • Benefits of Trade Secret Protection – No time restriction – Broader Scope – Easier?
  4. 4. What Is a Trade Secret? • 47 states have adopted the Uniform Trade Secrets Act (UTSA) as well as the District of Columbia and the U.S. Virgin Islands. 4 • Massachusetts, New York, and North Carolina have not enacted the UTSA at this time.
  5. 5. What Is a Trade Secret? The Uniform Trade Secrets Act § 1(4): “Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. 5
  6. 6. Factors Courts May Consider 1. the extent to which the information is known outside of the business 2. the extent of measures taken by the business to guard the secrecy of the information 3. the ease or difficulty with which the information could be properly acquired or duplicated by others 4. the extent to which it is known by employees and others involved in the business 5. the value of the information to the business and its competitors 6. the amount of effort or money expended by the business in developing the information.
  7. 7. What can be a Trade Secret? • Strategic plans • Algorithms and formulas • Tip: name your trade secret to increase likelihood of trade secret finding 7 • Customer lists • Pricing models • Manufacturing processes • Product design information
  8. 8. What is not a Trade Secret? • General knowledge in the trade or special knowledge of those persons who are skilled in the trade • Publicly available information, but ... 8
  9. 9. Reasonable Security Measures • This factor is key, frequently at issue in litigation
  10. 10. Common Security Measures 1. Use “CONFIDENTIALITY” stamping 2. Non-disclosure agreements both for employees and vendors 3. Limit physical access to facilities that house their secrets (identification badges, key cards, locks, security fences, guards, security cameras, alarm systems, and sign-in sheets) 4. Limit physically where the trade secret can reside in your facility 10
  11. 11. Common Security Measures, Cont’d 5. Visitor policies that govern where visitors can travel in the facility, requiring a chaperone, requiring execution of a non- disclosure, etc. 6. Password protection for computers and files 7. Employee policies: – Limit downloading of information onto external devices – Limit forwarding of information to web-based email addresses – Require that work be done on work-issued computers – Prohibit sharing except on a need-to-know basis 11
  12. 12. Tips for Ensuring Your Trade Secrets Do Not Walk Out Your Door • Demonstrate by example • Train your employees! – Key topics: • What you consider to be a trade secret • How trade secrets should be treated – Educate employees at start of employment (or upon acceptance of new position) and annually • Require written acknowledgment of training 12
  13. 13. Tips for Ensuring Your Trade Secrets Do Not Walk Out Your Door, Cont’d • Conduct exit interviews with employees – Remind them of obligations (provide them with a copy of any non-disclosure agreement) and ask if they have questions – Invite them to ask you if they want to take something – Collect all property (and note date and time upon which these items were collected) – Ask the employee to sign a statement acknowledging that they have returned all company property and have not retained anything 13
  14. 14. Tips for Ensuring Your Trade Secrets Do Not Walk Out Your Door, Cont’d • Immediately deactivate a departing employee’s access card and computer access (note date and time upon which this is done) 14 • If employee is going to a competitor, make resignation effective immediately
  15. 15. What to do if you suspect your trade secrets have been stolen • Do something (failure to do something may threaten trade secret status down the road) • Quarantine any computer or electronic-storage device at issue • Involve authorities?
  16. 16. Questions? Nicole J. Druckrey 414-277-5777 nicole.druckrey@quarles.com
  17. 17. Set the date: Next month’s webinar is July 15th Taking the Plunge into Entrepreneurship: How to Dive in Intelligently Presented by Jennifer Hill, Co-Founder at Sixty Vocab Former international startup lawyer turned entrepreneur
  18. 18. Remember to sign up for Traklight’s blog… The best place to get IP information from best practices to white papers to fun IP cultural topics!
  19. 19. Thank you for attending (and interacting)! We will send you a link to the recorded session and slides. Still have questions? Contact: info@traklight.com

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