Terch & AssociatesBlogRisk ManagementSafeguarding Trade Secrets: Best Practices for Businesses in the Digital Age

Safeguarding Trade Secrets: Best Practices for Businesses in the Digital Age

In today’s digital landscape, protecting trade secrets has become more challenging yet imperative for businesses across various industries. As information flows more freely and remote work becomes the norm, safeguarding sensitive data demands a proactive approach.

Both Minnesota and federal laws recognize trade secrets as nearly any type of valuable information providing a competitive edge to a business. To protect confidential information under these laws, businesses must take reasonable steps to maintain security. Here, we outline essential strategies and recommendations for businesses to protect their trade secrets in an online environment.

1) Mark Confidential Information and Limit Access

Ensuring the confidentiality of sensitive information begins with clearly marking such documents as confidential and restricting access to authorized personnel only. By adopting a “need to know” basis dependent on job responsibilities, businesses can limit the exposure of their trade secrets. Unique usernames and passwords could be required for access in order to monitor who logs onto software containing protected information. It is essential to track access and usage of such information effectively to keep aware of any variances in regular activity.

2) Implement Comprehensive Policies for Remote Access

Remote work arrangements require robust policies to mitigate risks associated with data breaches. Businesses could prohibit the use of public Wi-Fi and mandate secure VPNs for remote access to ensure the integrity of sensitive data. Furthermore, the transfer of company information to and from personal email or cloud storage accounts should be prohibited. For employees using personal devices, a Bring Your Own Device (BYOD) policy with stringent restrictions on the use and disclosure of company data should be created and enforced.

3) Enforce Non-Disclosure Agreements and Employee Exit Procedures

Enforcing non-disclosure agreements (NDAs) and conducting employee exit procedures could be important components of trade secret protection. Employees exposed to confidential information may be requested to sign NDAs, conflict of interest agreements, invention assignment agreements, and notices regarding the return of company property. When employees resign, it is best to conduct exit interviews and have an attestation signed affirming the return of all company confidential information and property.

4) Establish Regular Audits and Review of Policies

Regular audits of policies and procedures for trade secret protection are essential to detect any breaches. Providing comprehensive training to employees on any information protection policies, regularly monitoring usage, and limiting what is downloaded and sent outside of the company are steps to enhance this security.

5) Utilize Virtual Knowledge Sharing Protection

During remote work arrangements, trade secrets may need to be shared via online video conferences. Specific measures may be taken to ensure confidentiality during such meetings. This includes restricting participants to those with a “need to know” basis, requiring password entry for each videoconference, and utilizing waiting room features to verify participants’ identities before permitting entry. Those in attendance should conduct video conferences in private spaces, away from family members, and with disabled recording features to limit the possible spread of information. Businesses should remind those in the conference of the confidential nature of the material and require signed NDAs before disclosing such information.

By implementing these strategies and remaining vigilant, businesses can mitigate the risks associated with trade secret misappropriation and protect their valuable intellectual property assets in an online environment. Proactive practices are key to ensuring legal protection of trade secrets and maintaining a competitive edge in today’s digital age.

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