In the cutthroat world of business, possessing a unique advantage, such as Coca-Cola’s syrup formula or Google’s search algorithm, can offer a competitive edge. These well-guarded secrets are not simply marketing tactics but the foundation that helps these giants maintain their market leader positions. As a business owner, identifying and protecting your own trade secrets could pave the path to long-term success.
Uncovering trade secrets
Trade secrets are forms of intellectual property that play an important role in providing companies with a competitive advantage, economic gain and strategic position. According to the United States Patent and Trademark Office (USPTO), this piece of information must meet the following three critical elements to be considered a trade secret:
· Contain information that provides economic value because it is generally unknown
· Should be valuable to those who cannot obtain it legitimately
· Subject to reasonable measures to keep it secret
Any information lacking any of these elements may not fall under a trade secret. For example, a trade secret that becomes public knowledge may no longer qualify for protection by state and U.S. law.
Examples of trade secrets
Intellectual property that makes your company unique, such as a customer list, recipe, formula, code or algorithm that only you or a select few know, may be considered trade secrets, granted that you keep them confidential.
A few examples of sought-after trade secrets are:
· The recipe that gives Dr. Pepper sodas their unique flavor
· The secret ingredient that makes Twinkies tasty
· The technology that powers Apple products
Leaking such valuable and confidential information could be detrimental to these companies. Customers could switch to competing brands, drastically hurting the company’s financial performance.
As such, it is crucial to safeguard your trade secrets to preserve your company’s profitability.
Steps to protect trade secrets
When your company has a valuable secret, know that rivals may take sophisticated measures to obtain them. They may poach your employees or strike a deal with your business partners. Preventative measures, such as installing robust IT protections, limiting access to important documents and requiring non-disclosure agreements, can make it harder for competitors to steal your secrets.
As a business owner, deliberately recognizing the knowledge that offers your company an advantage and investing in preserving its secrecy may be critical to your success. Apart from sophisticated security software, there are also various legal options that may help you mitigate any chances of a leak.
