As a small business owner in Philadelphia, you will likely always seek ways to gain a competitive edge. However, have you considered the value that lies within your own organization’s unique knowledge and processes?
Trade secrets are information an organization keeps confidential to give it a business advantage. The essential characteristic of a trade secret is its secretive nature. If the information becomes public knowledge, it loses its status as a trade secret. It can include various forms of information such as recipes, manufacturing processes, marketing strategies, client lists, and software algorithms.
One classic example of a trade secret is the recipe for Coca-Cola, which has remained a secret for over 130 years. Another example is Google’s search algorithm, which determines the ranking of websites in search results. These examples underline the importance of trade secrets and how they can provide a significant competitive advantage.
Trade Secrets Vs. Confidential Information: Similarities and Differences
While trade secrets and confidential information may seem synonymous, there are crucial differences between them. Both involve sensitive information that a company wishes to keep private. However, for information to qualify as a trade secret, it must meet specific criteria.
A trade secret must have commercial value because it is secret, and the holder must have made reasonable efforts to keep it secret. On the other hand, confidential information can be any information deemed sensitive by an organization, but it might not necessarily confer a competitive advantage if it were to remain secret.
For instance, an employee’s personal details are classified as confidential information, but they do not necessarily provide a competitive edge to the company. On the contrary, a unique manufacturing process would be a trade secret as it provides a competitive advantage and is not generally known to the public.
Protecting Trade Secrets: Employee and Non-Employee Relations
Trade secrets can be vulnerable to misappropriation by employees and those outside your organization. Therefore, implementing robust measures to protect them is crucial.
With regards to employees, make sure to include confidentiality clauses in employment contracts. Regular training sessions can help employees understand the importance of keeping trade secrets confidential. Exit interviews can be used to remind departing employees of their ongoing obligations.
As for non-employees such as suppliers or partners, non-disclosure agreements (NDAs) are a common legal tool used to protect trade secrets. An NDA is a legally binding contract that outlines the information to be shared and prohibited from disclosure.
Our Philadelphia Business Attorneys at Sidney L. Gold & Associates, P.C. Can Work to Protect Your Business Assets
In today’s competitive business environment, protecting your trade secrets is more important than ever. For legal help, speak with our Philadelphia business attorneys at Sidney L. Gold & Associates, P.C. Call us at 215-569-1999 or contact us online to schedule your free consultation. Located in Philadelphia and Pennsauken, New Jersey, we serve clients in South Jersey and Southeastern Pennsylvania, including Wilkes-Barre, Scranton, Northeast Philadelphia, Bucks County, Chester County, Delaware County, Lehigh County, Montgomery County, and Cherry Hill.