Business Lawyers Blog
Trade secrets are vulnerable whenever confidential information is shared with employees, contractors, or other personnel as part of day-to-day operations. Without clear internal policies and enforceable agreements, proprietary information may be disclosed, misused, or retained after an individual leaves the company.
Structure Law Group, LLP’s Los Angeles intellectual property lawyers advise businesses on legal strategies to protect trade secrets and other proprietary information, including the drafting employment agreements, confidentiality provisions, and internal policies designed to support enforcement under California law. The following are several practical measures companies should consider when evaluating trade secret protection.
Protecting Trade Secrets: Essential Safeguards
Businesses should use a multi-dimensional approach to protecting IP.
- Use Non-Disclosure Agreements with Employers and Contractors
A major risk is that an employee with access to your company’s trade secrets will take the information with them when they leave. Alternatively, they might share it with a competitor. You can use a professionally-drafted non-disclosure agreement (NDA) to guard against these risks.
An NDA is a binding contract under which an employee agrees not to disclose confidential information or intellectual property, and not to use that information outside the scope authorized by the company. If the employee violates the agreement, the business may pursue legal remedies, including claims for damages and other available relief under the contract or applicable law. NDAs are critical for protecting IP, including trade secrets.
- Limit Access to Trade Secrets
Some of the most valuable trade secrets include:
- Customer lists
- Algorithms
- Pricing strategies
- Formulas
- Manufacturing processes or methods
Access to confidential and proprietary information should be restricted to employees and contractors whose roles require it. Common safeguards include password-protected repositories, role-based access controls, and encryption of sensitive files to reduce the risk of unauthorized disclosure.
As businesses expand, access controls are often applied inconsistently, resulting in broad internal access to trade secrets and other proprietary materials. A periodic trade secret review can help identify which categories of information require protection, determine which personnel need access, and implement practical controls to limit exposure across the organization.
- Monitor Any Illegal Use
If you suspect an employee violated an NDA, then take swift action, as delay will only allow others to trample on your rights. Quick legal action can create disincentives for others to share your trade secrets or try to exploit them for financial gain.
Monitoring takes time, and many startups lack critical resources. Contact our IP team for assistance. We can discuss proven strategies for monitoring unauthorized IP use.
Call Structure Law Group, LLP’s Los Angeles Office
California businesses should take a deliberate approach to protecting trade secrets and other intellectual property, particularly because California state law places significant limits on restrictive covenants such as non-compete agreements.
Relying on provisions that may be unenforceable can leave important business assets exposed. A more effective approach is to implement a broader protection strategy that combines carefully drafted agreements, internal controls, and clear confidentiality practices designed to support enforcement if a dispute arises. Structure Law Group, LLP advises businesses on developing trade secret protection strategies tailored to California law and operational needs. Call SLG’s Los Angeles office at 310-818-7500 to schedule a consultation with one of our intellectual property lawyers.