Is your business truly protecting its most confidential information? Businesses derive value from maintaining information in confidence, so the failure to protect against that loss can be detrimental. Likewise, the failure to take sufficient steps to protect the business’s confidential proprietary information, i.e. trade secrets, can undermine any enforcement action brought in court to recover the trade secrets and stop any use of them. The one-off onboarding instruction is not enough. As employees have superior knowledgeable about risks and may be the persons who improperly acquire the trade secret, an annual business confidentiality refresher provides an opportunity to plug unseen holes and to amass evidence to be used should there be a misappropriation.
Revisiting with employees the business’s protocols ensures protections are implemented and risks avoided. A recurring program ensures employees know, follow, and enforce measures to maintain confidentiality, particularly as those may change over time to address new threats. Employees are reminded of the importance of safeguarding this information and made aware of the current procedures for securely handling trade secrets. These refreshers may be necessary as clients may demand safeguards on their own information provided to the business, changing the existing protocols. Additionally, these corporate training exercised may be essential to compliance with changes in the laws to which the business is subject. When confidentiality is consistently emphasized and discussed, it becomes an integral part of the company’s culture, making it more likely that employees will incorporate these practices into their daily routines. Regular meetings create a culture of confidentiality within the organization. Employees as gatekeepers may be significant as breaches of confidentiality can result in financial and reputational damage to a business. Beneficially, these recurring refreshers afford the employees the opportunity to pose significant questions, including why such protocols are of significance, and to identify potential risks of data theft, whether due to changes in technology or failures of management. Moreover, employees may have suggestions for further protection of trade secrets without interfering with business operations.
A record of regularly refreshing employees on the business’s confidentiality protocols is helpful evidence in any trade secret theft action, particularly where a preliminary injunction may be sought. To succeed on a trade secret theft case, the business must establish the information in question is a trade secret and that it was improperly acquired by the defendant. Establishing the information is a trade secret requires establishing the information was not publicly known, has value, and was the subject of reasonable measures to preserve its secrecy. To obtain a preliminary injunction, the business must establish, among other details, that it is likely to succeed in the case. The records of the regular refresher evidence that the information was subject to those reasonable measures which were enforced. The attendance records establish each employee was aware of those requirements, which may be pertinent when the alleged thief is a former employee who attended those meetings and acknowledged those protocols. Putting that evidence before a judge and jury may sway the case towards protection of the information in question.
Given the significant benefit to conducting an annual business confidentiality refresher and the cost associated with loss of the trade secret and/or attorneys fees for enforcement, it behooves a business to annually conduct such refreshers and maintain the records of attendance and presentation content.
James E. “Jim” Hudson III is a shareholder in the firm’s Intellectual Property Law Group. For more information contact Jim here.