Securing your development secrets
While a patent enables you to protect an inventive idea by dedicating it to the public, a trade secret protects an idea by maintaining the secrecy of it. By being the first to file a patent for a particular idea, the owner is granted a monopoly for a limited amount of time, but in exchange for this, the information is disclosed to the public, who is then free to use the invention once the patent monopoly expires. Occasionally, you will have innovations that you can be confident others won’t independently replicate–like the formula for Coca-Cola or the algorithms for Google–where greater value can be realized for a longer period of time by keeping the idea under wraps, and relying on trade secret protection.
Non-Disclosure Agreements (NDAs)
Whenever you are dealing with another party to whom you plan to disclose your trade secrets–whether a prospective employee, a consultant helping for a particular project, or another company you are going to partner with–it is a good idea to have them execute an NDA. In cases where you cooperate with another business for co-development, a mutual NDA may be appropriate. By making sure these agreements are in place, you can have some peace of mind when you disclose your confidential information to these other parties, who will be legally obligated not to disclose your valuable information.
When an employee leaves your company, you want to make sure that the valuable information that they helped develop, or to which they were exposed, does not get exploited at his or her new company. A noncompete agreement (sometimes known as a Covenant Not to Compete) can help ensure that the ex-employee maintains the secrecy of your valuable information even after they leave your company, and ensures that your trade secrets do not end up being used by a competitor.