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Trade Secrets - What are they and do they need to be protected?

An article in this morning’s Detroit News illustrates the need for companies to protect trade secrets. According to the article, a lawsuit has been filed by Palace Sports and Entertainment against Olympia regarding the recent departure of Tom Wilson and several key employees that once worked for Palace. The lawsuit alleges that these key employees stole confidential information about suite rental, ticket sales and corporate sponsorships.

The fact that these well established businesses are having these types of problems illustrates the need for all companies to look at the value of their information and the steps that have been taken to prevent the disclosure of that information to a competitor. Indeed every business that uses any information to secure a competitive advantage over competition has a trade secret that should be protected. These “secrets” can take the form of customer lists, pricing information, engineering information, or even just process information that gives one business an advantage in the market place.

At a minimum a business should have agreements with their employees identifying the confidential information as a trade secret and making it clear to those employees that there are consequences to leaking that information to others. From there a business should evaluate the individuals that have access to the information and any possible ways that their proprietary information could get into the hands of competitors.

It is often a good idea to involve an attorney in the process of protecting trade secrets to make sure that everything that can be done to protect the information has been pursued. As always, it is better to review these issues before there has been a disclosure and the business has been destroyed.