Lesson 4: Practical Measures for Protecting Confidential Information/Trade Secrets
Taking ‘reasonable’ measures to guard the secret: What is "reasonable" will vary depending on the circumstances.
Establishing minimal levels of protection will likely result in the confidentiality being lost, and with it, your legal entitlement. Too much protection may be cumbersome, costly and stifle the creative use of the confidential information/trade secrets.
The goal should be to take strong proactive measures to protect your sensitive information as it demonstrates to a court that the information is valuable to you and you are serious about protecting it. A court will therefore be more likely to protect you against disclosure and misuse.
We will illustrate what reasonable protections might look like in the context of each of the scenarios below.
Scenario 1: Carelessness
The CEO of Acme goes in to meet with ABC Inc., whom she hopes to partner with, to discuss a secret new method for manufacturing a particular drug. When she goes to register with the front desk and fill out ABC Inc.’s extensive security questionnaire, she leaves the folder with information detailing the secret method and marked with the label “Confidential Information” in plain sight in the reception area. The reception area has other people sitting in it and the folder is outside of her line of sight.
Scenario 2: Open Offices
Acme has just recently moved into a building where one of its competitors' offices is on the same floor. Acme has always had an open door policy and so it encourages people to work out in an open space rather than work in separate confined offices. The result is that people leave their materials on their desks and tend to have conversations while they are at their desks. These conversations can be easily overheard, even outside of Acme's premises.
- physically restricting access to the locations where the confidential/trade secret information is stored and using encryption or passwords to protect the security of the information;
- implementing physical protections like, for example, installing security cameras and having closed off rooms where confidential discussions can take place;
- marking documents or other media that contain confidential information/ trade secrets with a conspicuous marker like "CONFIDENTIAL/PROPRIETARY" as they are helpful to remind parties that have access to these materials about their obligations with respect to protecting the secrecy of the materials;
- using code names because doing so allows people to refer to something without disclosing details of the thing they are referring to. It also reinforces for people the secrecy associated with the information that is the subject of the code name.
However, in shaping its confidentiality protocols, Acme might also consider some of the benefits that might accrue by maintaining some aspects of its open door policy. Open exchange between employees can sometimes stimulate innovation and new ideas which, in turn, can generate even more valuable IP.