Don't Forget Your Employees

Contractual barriers
Contractual barriers generally involve the use of non-
disclosure or condentiality agreements. In fact, such
agreements are generally considered as one of the best
ways to protect your trade secrets.
You should require every existing employee and all new
employees to sign an employment contract with non-disclosure
or condentiality provisions. For your employees in China, the
contract should be in both English and Chinese to prevent
an employee from claiming he or she did not understand
the condentiality obligations. Such agreements should also
be entered into with suppliers, subcontractors and business
partners who are given any level of access to your trade secrets.
Be sure to document the trade secrets protection measures
you take and make sure your trade secrets protection policy is
written down. It is also essential to maintain sucient records
of the ow of information in and out of your company, including
keeping records of meetings, discussions, E-mails, written
correspondence, and the transfer of electronic les so that you
can conduct an investigation and have evidence in case you
suspect your trade secrets have been misappropriated.
Finally, be vigilant in protecting your trade secrets and
implementing your trade secrets protection policy. Businesses
usually lose their trade secrets because they are too relaxed
about keeping the information inside the company. Make sure
your management is informed. Trade secrets are a double-
edged sword. Your sta and workers must be told not only to
protect your trade secrets but also not to obtain or utilise the
trade secrets of others. Designating a person to be in charge
of ensuring compliance with your trade secrets protection
policy may be a useful option to consider.
Most the of trade secrets cases involve current or former
employees, disgruntled or otherwise. It is simply the most
common way trade secrets literally walk out the door. A
typical the of trade secrets case generally involves an
employee leaving the company for a competitor and the
company discovering shortly aer that its competitor is
selling a product that looks suspiciously familiar.
The best way to avoid such a situation is to have an employment
agreement with non-disclosure provisions. In addition, you
should periodically and politely remind your employees
about their condentiality obligations. For employees who
are leaving the company, be sure to hold exit-interviews,
have them return documents, materials, computers, and les,
and bring the non-disclosure agreement to their and their
future employer’s attention. For new employees, you should
ask them whether they have a non-disclosure agreement
with their former employer and to take appropriate steps to
make sure you do not misappropriate their former employer’s
trade secrets. For an important or senior-level employee who
is intimately knowledgeable about your business, you may
want to consider also having a non-compete agreement, but
make sure that it is of a reasonable duration and otherwise
complies with China’s Labour Contract Law.
Trade secrets may also be inadvertently disclosed by
employees. For example, an overzealous engineer may
give away too much technical information when giving a
presentation at a conference. It is important to recognise
that people simply love to talk, especially people like many
engineers and designers who are passionate about their
work. Also, in particular for China, your employees in China
may not have the same understanding of IP rights and
proprietary information or expectations about protecting such
information as you do. These concepts are all relatively new
aer all. For example, your employees may not immediately
understand that a project proposal or marketing proposal
may contain valuable sensitive information. It is important
that you provide training in trade secret detection and
management to your employees. Having protocols and rules
to follow will make it easier for the employees to learn how
to proceed in every scenario.
Finally, follow the golden rule of “need to know” when
managing your employees. This rule should be considered as
a basic policy when determining which employees will have
access to condential information. Trade secrets should be
accessible by those employees who need to know the content
to perform their job. If an employee can perform their duties
without knowing the protected information then he/she
should be excluded from having access to that condential
information. This way the number of employees in contact
with the trade secret is reduced signicantly, making it easier
to track the leak if it happens.
3. Don’t Forget Your Employees

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