When many entrepreneurs think of trade secrets, they think of high-tech companies or large manufacturers. For example, software architecture and source code are generally protected using trade secrets. Another example of businesses that have many trade secrets is legacy manufacturers which need to protect how products are made, what products are made out of, etc. Famous examples of trade secrets from these industries range from Google’s® search algorithms to KFC’s® “11 secret herbs and spices.”
But all businesses – even the most “simple” – have trade secrets. At the very least, all businesses have customer lists, vendor lists, profitability/pricing information, etc. – with many businesses having much more. The best way to evaluate whether certain information might be a trade secret is to think about real-world business consequences. I often ask my clients,
If one of your best employees left for a competitor and took certain business information with them, would that be upsetting?”
If the answer is “yes,” then that information needs to be evaluated for potential trade secret protection. That can run the gamut from customer lists to the “secret sauce” that makes a business successful.
Whether your business is large or small, below are five important tools that can be used to protect trade secrets.