Don't Forget Your Employees

• Pages: 5-5

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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