Trade Secrets and NDAs
Many business owners want to be aggressive in protecting their competitive advantage. While service businesses often jump right to the non-compete agreement and product businesses jump right to patents, there are other techniques to consider as well.
The first step is to identify what information you have that gives you a competitive advantage from not being known and readily identifiable/discernable. These would be trade secrets and confidential information. They are protected by controlling who has access to the information and having them sign an agreement to keep it confidential.
You also need to take reasonable steps to protect the information. What is reasonable depends on the circumstances, but consider the following:
• Computer passwords
• Locked physical files
• Limited copies of sensitive information
• Numbered copies of sensitive information
• Sign a physical log to access information
• No electronic formats
• “Need to Know” disclosure
• Non Disclosure/confidentiality agreement
Every business should have a standard non-disclosure or confidentiality agreement to protect its sensitive information. These can be used with potential business partners, vendors, employees, and contractors.