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Protecting Your Company’s Trade Secrets

Under Georgia law, a trade secret is any information that is secret, i.e., not commonly known or available to the public; has economic value because it is a secret; and is subject to reasonable efforts to maintain its secrecy.  See O.C.G.A. § 10-1-761(4).  Thus, employers can only obtain legal relief against employees and former employees who misappropriate trade secrets if they took reasonable steps to maintain the information’s secrecy.  To protect their trade secrets:

  1. Employers should identify what information in their possession qualifies as a trade secret.  Information is not a trade secret simply because it is confidential.  Rather, the confidentiality of the information itself must create economic value.  See, e.g.Essex Group, Inc. v. Southwire Co., 269 Ga. 553, 555, 501 S.E.2d 501 (1998) (logistics systems); Hilb, Rogal & Hamilton Co. of Atlanta, Inc. v. Holley, 284 Ga. App. 591, 597 644 S.E.2d 862 (2007) (tangible customer lists); Insight Tech., Inc. v. Freightcheck, LLC, 280 Ga. App. 19, 27, 633 S.E.2d 373 (2006) (software).  Information that is “confidential” can be protected by entering into non-disclosure agreements with employees and third parties.  See paragraph 4 below.
  2. Employers should adopt and implement a written policy that defines with specificity what information is a trade secret and explains that trade secrets are company property and may not be disclosed during or after employment without express, written authorization.   Employers should require their employees to sign written acknowledgements of this policy.
  3. Employers should restrict access to trade secrets to those employees with a “need to know.”  Employers should also protect trade secrets by using physical and electronic security features, such as shredding, confidentiality designations, encryption, password protection, and the like.
  4. Employers should require their employees execute confidentiality and non-disclosure agreements that apply both during and after employment.   These agreements should be tailored to an employer’s specific needs, including describing with some specificity what information is a trade secret, and the temporal and spatial dimensions of the agreement.
  5. Employers should use non-competition agreements to prevent employees who have access to trade secrets from utilizing them to compete post-employment.  As of November 2, 2010, Georgia law has been substantially liberalized with respect to non-competition agreements entered intoafter January 1, 2011.
  6. Employers should conduct exit interviews when employees terminate to confirm that they have not retained any trade secrets.  The employer should also obtain a signed, written certification from employees to that effect.

If your company needs assistance in implementing this, and other, policies and procedures to protect your trade secrets, call Cary Ichter or William Daniel Davis at Ichter Davis LLC.

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