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Eight Ways to Proactively Protect Your Intellectual Property and Trade Secrets

In an information economy, the primary things that bring value to your company, equipment, holdings, and capabilities are trade secrets. Unlike patents or trademarks, trade secrets do not require public disclosure—on the other hand, losing such information to a competitor (or former employee) could cost massive amounts of revenue and market share.

Intellectual property protection is vital to maintaining safeguards and secrecy for your most valuable business assets. IP can consist of many different parts, from logos and corporate identity to products, processes and client lists. Because the Texas Uniform Trade Secrets Act requires companies to take “reasonable measures” when protecting secret information, IP protection is even more important to establishing cause for action when it is stolen or misappropriated. Without taking steps to protect your property, you may not have legal remedies available.

Protecting your trade secrets serves a dual purpose. The obvious purpose is to preserve your business’ long-term growth and competitive edge, as well as its goodwill value. The other purpose is to show a court that you took steps to protect your intellectual property (IP), which helps strengthen any IP lawsuits you’ll need to file. Below we’ve assembled some of the best ways you can protect your trade secrets in concrete and demonstrable ways. If you still have questions after reading the list below, we invite you to contact our attorneys.

Eight Tips to Proactively Protect Your Intellectual Property and Trade Secrets

  1. Label Vital Documents as Confidential –This is the most basic step your organization can take. Review your company’s internal resources and documents—are any of them vital to your operations? Would you lose anything if they fell into a competitor’s hands? As you review your documents, gather and label all your most vital resources, whatever they are: customer lists, data, methods, procedures, suppliers, etc. Even a simple labeling system could lend credence to your case if someone attempts to use your IP unlawfully.
  2. Restrict Access Physically & Electronically – Invest in your IT security capabilities. Ensure that only authorized employees and third-parties can access your resources, either with physical or limited electronic access. If you can, establish levels of access—this ensures that only necessary employees have access to your most vital resources.
  3. Establish Trademarks and Copyrights – Whether it is industrial property, a work of authorship, or a product or service unique and identifiable to your brand, intellectual property can be just as, if not more, valuable than any physical asset owned by your company. As such, establishing and protecting such ideas and inventions through trademarks and copyrights becomes essential, especially in the internet age. When these safety measures are in place, your business is in a better position to enforce and defend copyrights and trademarks in matters of infringement.
  4. Use Non-Compete / Non-Solicitation Agreements – The law allows for restrictions on employees or former employees who had access to trade secrets, client lists, or other propriety information unique and useful to your company. But to be legally enforceable under the Texas Business and Commercial Code, covenants not to compete have to be crafted carefully by an experienced Texas non-compete lawyer and be reasonable in duration, scope, and geographic focus.
  5. Strengthen Confidentiality Agreements or NDAs – When they concern an employee, these agreements are similar to non-competes. However, non-competes and confidentiality agreements can also be used with independent contractors or in business-to-business relationships. It’s vital to put protections in place that are tailored to your specific situation, including joint ventures, contractual relationships, agents, and licensees.
  6. Enforce Licensing or Technology Development Agreements – Technology licensing and development agreements are increasingly important to businesses in both Texas, across the United States and abroad, in industries including computer hardware and software, nanotech, biotech, medical devices, pharmaceuticals, bioinformatics, energy, and environmental technology. These agreements can include Licensing technology to or from another company or establishing a joint venture to develop technology. A very important, but often overlooked aspect of a joint-development arrangement is the ownership of any intellectual property rights arising out of the development work. There are a number of ways of resolving technology-ownership issues as long as a carefully drafted and enforceable agreement is in place.
  7. Consider Work-for-Hire Agreements – When an employee or a contracted party creates an intellectual work as part of his or her job, issues may arise as to whether the resulting work belongs to the employer. Employers need to protect themselves with a strong agreement that uses the work-for-hire doctrine to protect their intellectual property and address possible areas of concern, including the scope of the work. This can include work done in an employee's spare time, by freelance workers, and other situations.
  8. Create a Team for Handling Trade Secrets – One of the strongest ways you can protect your trade secrets is by appointing an individual or creating a team devoted to drafting and implementing your protective policies. Their commitment doesn’t have to be exclusive—it would be more effective to create a team with multiple functions, with the tools and authority to enforce trade secret protection. During this process, it is highly recommended to secure the services of a knowledgeable attorney.

As industry leaders who counsel businesses of all types and sizes, our Houston business attorneys at Hendershot Cowart P.C. have extensive experience helping clients protect, enforce and defend their intellectual property and trade secrets. If you wish to discuss your particular needs with a member of our legal team, contact us to request a consultation.


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