Thursday, April 24, 2008

Violation of Trade Secret

Violation of Trade Secret: How to Deal with it

Doing business involves various issues that necessitate careful planning and implementation in order to achieve success, financial stability or productiveness. Likewise, it is very vital for the company officials to employ strict rules in order to safeguard all their business operations and trade dealings. Yet, because of trade secret theft, many companies either suffer from losses or end up in closure.

Also because of such violations or illegal dealings, numerous lawsuits are being filed in courts by businesses to recover the cost of damages that they suffered from. A great example of such is the case filed by Tesla Motors against its competitor for allegedly stealing design ideas and trade secrets.

The definition of trade secret may vary depending on the state where a company operates. Yet, state laws generally define it as company information, which are not commonly known to the public majority. It provides a company of some economic advantages, which makes it worthy of being protected and of maintaining its secrecy.

Meanwhile, in order to protect your company from trade secret theft, following these measures may be helpful:

  • Let your employees sign a “Non-compete agreement.” – This type of contract will prevent your employee from working in your competitor’s company for a set period after his employment in your company ceases. In this way, they will not have the means of utilizing the information that they obtained from your company for the advantage of your competitors.

  • Avoid dealing with suspicious business transactions – Transact only with companies or individuals with proven integrity. Never divulge any of your company’s procedures to people whom you think unworthy of your trust.

  • Hire an attorney who has the expertise in intellectual property laws and other business laws – Having an attorney to give you advices will give your company the protection you need.

  • Treat your employees well – In many circumstances, employees who divulge company secrets are those who were discriminated or unfairly treated. It will also be helpful if you will give them proper trainings and provide their needs.