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USING NDAS as part of a trade secret program: IDENTIFYING Secrets

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The first step in any trade secret protection program is to identify what information and material is a company trade secret. A trade secret can be any information or know-how that gives a company an advantage over competitors who do not know or use the information.

It makes no difference in what form a trade secret is embodied. Trade secrets may be stored on computer hard disks or CD-ROMs, written down on paper or kept only in employees’ memories.

Some companies conduct periodic trade secret “audits” or inventories in which they attempt to identify all the company information that should be protected as a trade secret. If you do this, it’s best not to attempt to make such audits too detailed. If you overlook an important trade secret and it doesn’t show up on a supposedly exhaustive list, someone might be able to claim it really wasn’t a trade secret. To avoid this, don’t attempt to create a detailed inventory of every piece of paper or computer file containing trade secrets. Rather, create a simpler inventory describing your trade secrets in more general terms—for example “all documents relating to XYZ Project.” Be sure to periodically update this list.

Not everything is a trade secret. Some companies make the mistake of assuming that virtually all information about the company and its products is a trade secret that must be protected from disclosure to outsiders. They then find that attempting to protect such a morass of information is very expensive and burdensome, and they may end up abandoning their protection program. Use your common sense in deciding whether disclosure of a particular item of information to a competitor would really harm the company.

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