GlobalAutoTV
Click to watch Conway A. Jeffress -
Click to watch Conway A. Jeffress -
asia resources


Need an office in Asia? Office suites, meeting rooms, virtual offices, network access



free downloads
ASIA: "Japan: JETRO Releases Global Trade and Investment Report 2015" report

ASIA: "Japan: JETRO Releases Global Trade and Investment Report 2015" report. 13-page report by JETRO.

proceed to download
eJournals




back to index backASIAtalk July,  2005


Protect company trade secrets from in-house thieves

When most people hear the term trade secret” they automatically think about something major like the formula for Coca-Cola; they don't realize that trade secret theft can impact businesses of all sizes.

When employees move on to new jobs they may be tempted to copy files and take key information about the company's business practices with them. The result may arm the competition with key information about your business.

Employers can protect themselves by understanding their rights under trade secret laws, which protect businesses from theft of confidential information. Trade secrets encompass far more than formulas and can include customer lists, customer preferences, prospective customers, prices and pricing policies, costs, margins, internal weaknesses, business, marketing, strategic, and sales plans, business processes, planned products and services, mergers and acquisition targets, and identities of, and information about, suppliers and employees and more.

If an employee were to go to a competitor and use the former employer's confidential information (even if he or she allegedly only memorized” this information), the Uniform Trade Secret Act would allow a suit for an immediate injunction against use, disclosure, or even threatened use” of such information (and in some cases even against employment with the competitor or solicitation of the businesses' customers). The Act also allows recovery of damages to the extent that a trade secret violation is proven and in certain cases allows recovery of attorneys' fees from the offender(s).

If the information is truly valuable, the secrecy required for a trade secret claim may be demonstrated by some or all of the following:

  • Storage of information with locked or limited access.
  • Need-to-know information access.
  • Electronic key access to rooms/information.
  • Clear marking of confidential information.
  • Limited access of computer-stored information.
  • Visitor restrictions.
  • Employee policies on confidential information.
  • Routine verification of confidentiality procedures.
  • Routine employee reminders of confidentiality policy.
  • Pursuit of departing employees with access to confidential information.
  • Prohibiting removal of confidential information from company premises.
  • Restricting copying of confidential information (numbering copies, etc.).
  • Conducting exit interviews.

Small business owners need to understand their rights under the law and take the appropriate actions to protect their businesses. Here are a few things business owners need to know:

Noncompetes : These are separate from the filing of a trade secret claim and are a useful means of protecting a business from customer raiding or trade secret violations. These agreements bar employment with a competitor or at least raiding of customers. Such agreements may help to satisfy the Trade Secret Act, but are not necessary to bring a trade secret claim. Nonetheless, for employees in possession of information that is especially sensitive, non-compete or at least non-solicitation and non-disclosure agreements are an appropriate means of protection.

To be enforced in court (and such a claim should be brought quickly so that an immediate injunction may be obtained), a non-competition agreement (barring employment at a competitor) must be reasonable as to geographic scope, duration, and the line of work it prohibits (e.g., the former employer's business) and must have the purpose of protecting a reasonable competitive interest (such as trade secrets or good will).

Even if a non-compete agreement is not adopted, a non-solicitation agreement {in which the former employer's customers may not be solicited for a time (such as a year)}, or at least a confidentiality agreement (identifying business secrets), is an appropriate means of protecting trade secrets and the goodwill of customer relationships. These agreements also may be enforced by suit for injunctive and other relief.

Businesses of all sizes are vulnerable to trade secret theft. Company information in the hands of the competition can seriously harm or destroy a business. Advance planning and establishing confidentiality policies can save the future of your business.

Source: Butzel Long - GAI


previous page

go top



search our site


Loading

ASIAtalk

Other articles from the same issue (July,  2005).

Workaholism in Asia
play read on

The practice of low-cost country sourcing (LCCS) is accelerating
play read on

Increasing your value: An automotive global supply approach
play read on

A foreign perspective on China's ports and shipping
play read on

With sales rising 30% a year, Indian part maker investments will top $1 billion
play read on

Thailand: What are the legal requirements for establishing a company?
play read on

Establish a business presence in Japan in one of three modes
play read on

RMs can help thwart kidnappers
play read on

Don't put all eggs in China basket: METI
play read on

Protect company trade secrets from in-house thieves
play read on


Our Free eJournals
GlobalAutoExperts

To visit GlobalAutoExperts Directory, click here.


©2008 GlobalAutoIndustry.com | HCI Group, Ltd.
101 West Big Beaver Road, Suite 1400 | Troy, MI 48084 USA
USA Tel: +1.248.687.1060 | USA Fax: +1.248.927.0347
Fax UK: +44.(0)845.127.4765 | Fax Europe: +31.20.524.1659 | Fax Asia: +852.3015.8120