Know how to protect your know-how
22 Aug 2023
A company’s intrinsic expertise, ingenuity and savoir-faire are what makes it unique, marketable, and ultimately successful. When combined, these somewhat tenuous qualities, form part of the company’s intellectual property. How then does a company protect them in order to gain and maintain a competitive advantage?
Almost anything that a company uniquely does or creates is considered proprietary information. The way a company manages and protects its proprietary information may entitle such information to further protection as either ‘confidential information’, ‘know how’ or ‘trade secrets’. These terms can be defined as follows:
- Confidential information encompasses private internal proprietary information which is relevant to a business’s operations that cannot be learned from other sources.
- Trade secrets constitute confidential information that provide a business with an undisclosed competitive edge – think KFC’s 11 herbs and spices, Google’s search engine algorithms or MacDonald’s Big Mac sauce.
- Know-how is usually acquired through experience, and can include technical skills, including information, knowledge and techniques gained from working at the company, and can include confidential or proprietary information.
To safeguard these valuable assets, businesses must be proactive in identifying, protecting, and enforcing their know-how and trade secrets.
Identifying know-how and trade secrets
The first step in securing know-how and trade secrets is to identify them. Businesses should first undertake an internal audit of their key personnel, processes, technology, and proprietary information to determine what makes up their proprietary/confidential information, know-how and trade secrets.
These unique attributes might consist of client databases, software systems, marketing plans, recipes or any other private information that offers them an advantage over competitors. This invaluable information should be earmarked and documented as being either confidential information, know-how, or trade secrets, ensuring safety from copycats encroaching on distinctive and specific fields of practice.
Businesses should also take steps to ensure that both employees and stakeholders are educated about the value of protecting such information and knowing how to distinguish between secret and proprietary knowledge. Sensitive information must be classified and documented clearly as part of this process.
Protecting know-how and trade secrets
Once identified, companies should implement measures to protect their know-how and trade secrets from unauthorised access, use, or disclosure. Some strategies to consider could include:
- Confidentiality agreements: Requiring that anybody who has access to proprietary business information, including employees, contractors, and partners, sign confidentiality agreements. Such agreements obligate individuals to maintain the confidentiality of the information they have access to both during and even after their association with the company has ended.
- Non-Disclosure Agreements (NDAs): When disclosing confidential information to third parties, have them sign NDAs to obligate them to keep it private.
- Limit access: Only those who need to know should have access to confidential information. To prevent unwanted access, make use of strong access controls, such as encryption and password protection.
- Physical security: If the know-how involves tangible assets (think recipe in a safe), make sure these are stored safely and that only those who have authorisation are allowed access.
- Cybersecurity: Strengthening cybersecurity measures to guard against data breaches and cyberattacks. Security audits should be carried out to identify weaknesses and software should be updated regularly.
Enforcing know-how and trade secrets
Even with the best safety precautions in place, breaches of confidential information can and do unfortunately happen.
It is essential for businesses to respond quickly in these situations to preserve their intellectual property rights and know-how. Enforcement options include:
- Assessing the breach: Launch internal investigations to ascertain the scope of the breach, identify the responsible party, and estimate the possible damage.
- Record-keeping: Ensure that all records pertaining to the breach are properly documented and kept. This supporting evidence will be essential in taking legal action and demonstrating the validity of the know-how or trade secret.
- Legal action: Consult with intellectual property lawyers to investigate legal options, such as considering alternative dispute resolution processes, or instituting urgent legal proceedings if the breach is material and justifies taking legal action, for example.
Protecting company know-how and trade secrets is essential for companies looking to gain and maintain a competitive advantage in their respective industries. Companies can only protect their intellectual property and keep their position as market leaders by recognising their important and distinct intellectual property assets. The consistent implementation of relevant safeguards and taking immediate appropriate legal action against perpetrators will ensure that precious and unique skills and know-how are safeguarded effectively for businesses to flourish freely.
Article sourced from Adams & Adams.
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