Monday, January 11, 2016

How Much Trade Secrecy is Necessary?

Dear Rich: I read your article about trade secrecy programs. You write: "A small start-up company need not implement the same type of trade secrecy program as a Microsoft or IBM." Why not? A resource is the same in value no matter if it is a Microsoft, a start-up, or a hobbyist-inventor. Correct?
As we explained at our trade secrecy site, in cases of trade secrecy theft, courts seek evidence that your company took reasonable precautions to prevent people who are not subject to confidentiality restrictions from learning your secrets.
What's reasonable? That depends on the size of your enterprise and the value of your trade secrets. For example, you may feel that more care should be taken to protect extremely valuable software code or marketing plans than less unimportant customer lists. It's true that a start-up's trade secrets may ultimately have the same value as secrets held by Apple, Microsoft, or Facebook. But a start-up can implement a much simpler trade secrecy program simply because of the scale of its enterprise. With fewer employees, reduced contractor access, and smaller office geography, a start-up's trade secrets can be held closer to the chest without the complex security procedures of a NASDAQ giant. As businesses expand, so will the trade secrecy procedures.