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Businesses need to protect their trade secrets

On Behalf of | Oct 15, 2021 | Firm News |

Not every procedure or business practice needs to be a secret, but it pays to protect revenue-generating information known as a trade secret. Definitions vary, but Massachusetts defines trade secrets as  “anything tangible or intangible or electronically kept or stored, which constitutes, represents, evidences or records a secret scientific, technical, merchandising, production or management information, design, process, procedure, formula, invention or improvement.”

State law on trade secrets

Unlike the Uniform Trade Secrets Act, Massachusetts does not use the word “misappropriation.” Instead, defendants cannot embezzle, steal, carry away, copy, conceal a trade secret. They cannot obtain it through deception or fraudulent actions. In most instances, the theft of trade secrets can have an adverse effect on the business.

Protecting what’s important

In the modern era, information is a powerful resource. Businesses can protect themselves by:

  • Restrict information to only those who need access to do their job
  • Use non-disclosure agreements with business partners, employees and contractors
  • Create an environment where employees know the importance of protecting trade secrets
  • Have a monitoring system or protocols that can help track leaks
  • Continually updating these protections to address changing work environments (such as employees increasingly working from home or outside the workplace).
  • Conduct exit interviews that remind employees of their obligation even after leaving the company.

The bottom line

Employee carelessness is not a crime, no matter how big the mistake, but it is an offense that can lead to dismissal. Cases often involve events that already happened, thus addressing the issue may involve fixing a leak or preventing a similar mistake or theft.

However, it may be possible to pursue financial damages based on estimates of lost profits, unjust enrichment, and even reasonable royalties. The theft may also harm the company’s reputation, which can lead to additional damages.