Regardless of its size, every business harbor trade secrets. This confidential information has commercial value. They are responsible for the development and, in some cases, the survival of a society. Trade secrets are frequently crucial to company success. Some provide a major competitive advantage and others are simply invaluable. This information, very partially protected by current legislation, too often circulates freely among staff members. A business manager, whether of a small SME or a large company, must invest all the necessary efforts to keep this information confidential through the M&A advisory.
BEWARE OF THE SECRET…OF POLICHINELLE!
In order to ensure the confidentiality of the information and to preserve its value, the entrepreneur must be aware of the importance of trade secrets. It is crucial, in a global context of access to information and globalization, to make customers aware of information protection practices and the legislation that surrounds them. Too few have developed the reflex to control the flow of information within their walls. For a secret to remain a secret, prudence in the choice of recipients, assiduous vigilance, and the watch of non-disclosure is of primary importance but are not enough.
The shareholders’ agreement is the first place to ensure that the appropriate protection clauses are present. But what happens to executives, directors, minority shareholders, and employees at various levels? What mechanisms should be put in place so that secrets are not divulged to information-hungry competitors and do not become known to everyone?
PROTECTION STRATEGIES
Protective measures can easily be integrated into the employment contract of key employees and managers, or even through a specific agreement contract for this purpose. Furthermore, the idea of establishing a general information security and protection policy by means of a code of ethics is emerging in certain companies. This code of ethics would include the rules to follow concerning the confidentiality of the information conveyed.
It would list the different clauses and establish punitive clauses or reasonable indemnity clauses in the different circumstances. All current and prospective employees would be required to adhere to it by signing a clear commitment to this effect. The idea seems a rather original and easy means of application to enforce minimum protection of trade secrets.
KEEP SECRETS ITS SECRETS
It is better to plan a strategy for protecting confidential information to enforce your intellectual property rights. Realizing its usefulness following an unfair disclosure of private information can lead to significant damage for the company and be costly in legal proceedings. Protecting one’s secrets promotes the duty of loyalty of employees and clarifies the links between the various stakeholders. The development of a protection plan establishes the rules of the game with the staff from the outset and provides for the measures that apply when an employee leaves. The confidential information protection strategy makes it possible to react in the event of unfair competition or breach of confidentiality.
EXAMPLES OF TRADE SECRETS
- Customer lists
- Database
- Drawings and plans
- Programs and software
- Methods and strategies
- Processes and techniques
- Marketing Plans
- Advertising Concepts
- financial information
- Employee records
- Research activities
- Recipes and ingredients
Consult the INTER Notaries SME network to choose an M&A advisor in business law and intellectual property, who will assess in detail the flow of information within the company to better guide you.
The notary will help you identify who to target, and draft in detail the appropriate non-solicitation clauses, non-competition clauses, and confidentiality agreements to protect you. To each of these clauses are attached the punitive clauses in damages, adapted to each situation.
This document written by a notary and validly signed by the employee will give you the best way to act and win your case in the event of a dispute. The notary is the best-trained specialist to advise and guide you in this area. Note that such documents may also include arbitration or mediation clauses. These could allow you to save significant costs and avoid media coverage of the infringement of intellectual property rights.