Protecting Your Trade Secrets in the COVID-19 Environment
April 13, 2020
By Gabrielle M. Morlock and John Platt
In addition to the many complications, concerns and changes that working in the COVID-19 environment brings, it is important to evaluate the impact it plays on a company’s internal workings, one of which is a company’s trade secrets. A previously adequate trade secret policy may not still be sufficient, efficient or effective in the present COVID-19 environment.
Significantly, many more company personnel, whether employees or independent contractors, are now working remotely. For companies that are not used to this type of work structure, it can put the company’s trade secrets in jeopardy if its process is not adjusted accordingly.
To maintain a trade secret, federal and state law require that certain measurements be taken to ensure the secrecy of such trade secret information. This differs based on the needs of each company. However, the need for secrecy still remains and the measures a company takes needs to be effective in this new environment.
The following are some topics you may want to consider when re-evaluating your trade secret protection policies and procedures:
- Identify. Clearly know and identify what your trade secrets are. This is an aspect of your business that brings financial value to the company by being maintained as a secret. Identification does not need to be done in written form, however, a company should generally be able to know and identify what they are.
- Secure Networks. Ensure that your computer networks are secure. This may include evaluating how personnel are communicating, whether by mail, e-mail or other electronic system, or by mobile device or phone. Consider sending reminders often to personnel explaining the necessity of accessing secure networks and using secure VPN connections.
- Communication. Communicate with all personnel often that there is a need for secrecy to protect certain information. This should be tailored to the specific people you are communicating with and what their part is in the trade secret process and their duty to maintain secrecy. Trade secret information should be restricted to those with a need to know. Reminders should be communicated often.
- Markings. Ensure all documents and communications are marked appropriately. Such markings should be sufficient to put the person on notice that the document and information is required to be confidential or protected in a certain way, whether confidential, secret, proprietary, etc.
- Agreements. Ensure proper measures are taken to maintain confidentiality. This can be done by having company personnel sign a confidentiality agreement. If these are already in place, it may be a good idea to review them to ensure they are adequate for this new work environment.
- Protecting Hard Copy Documents. Ensure personnel understand the risks involved in printing confidential documents from a home printer and how to take proper care and protection of such documents at home. This includes proper document destruction procedures. A company may want to consider addressing how this should take place to ensure documents that are required to be destroyed are done so properly.
- Other Information. Address procedures involving other proprietary or confidential information such as financial and medical records, as applicable, and how such documents should be handled.
- Virtual Meetings. For virtual meetings involving trade secret information, a company should closely monitor and track attendees at the meeting. Companies may be inexperienced in using web conferencing software and should be using appropriate security settings and practices to maintain appropriate meeting privacy.
- Exiting Personnel. For personnel who are departing the company, the company should still consider conducting an exit interview. This can include discussions regarding their executed confidentiality agreements, and their obligations to maintain secrecy. The company should have procedures in place to ensure confidential documents are returned to the company and that all access to such materials is disabled.
Ultimately, a company needs to ensure that any reasonable person would know, or have reason to know, that the trade secret information was actually a trade secret based on how the information was handled. A company is responsible for controlling the access to such information. Therefore, a company may need to readdress its trade secret policies and procedures to ensure that it is continuing to adequately protect the information or risk losing its trade secret status and secrecy. A company may want to consider documenting any new policies and procedures that relate to the new COVID-19 environment and re-evaluating often to ensure it is effective.
©2020 Snell & Wilmer L.L.P. All rights reserved. The purpose of this publication is to provide readers with information on current topics of general interest and nothing herein shall be construed to create, offer, or memorialize the existence of an attorney-client relationship. The content should not be considered legal advice or opinion, because it may not apply to the specific facts of a particular matter. As guidance in areas is constantly changing and evolving, you should consider checking for updated guidance, or consult with legal counsel, before making any decisions.