Practical tips for safeguarding your information of commercial value...
A trade secret’s value depends entirely on maintaining its secrecy. Safeguarding trade secrets is required for a company to maintain competitive advantages that have been developed through investment in R&D, innovation, and personnel.
Securing your company’s confidential information will become even more vital when the new Norwegian Trade Secrets Act is enacted in the first half of 2021. The new Act introduces stricter requirements with respect to implementation of reasonable measures to keep information secret. If a company does not have the sufficient measures in place, valuable information may not be protected under the new law even if the information in fact is secret.
Every company that holds unique information of commercial value needs to consider whether it has sufficient measures in place to safeguard such information and consider implementing additional measures to that effect. The following measures are the most important ones that at least should be in place at every company:
All information that is unique and has commercial value for the company must be identified and documented.
All such information should be stored safely and be subject to access limitations, control, and strict data security. Your company must make sure that employees only get access to such information on a strict need to know basis. Keep a list naming all employees that have or have had access to the information. This list should be updated on a regular basis. Copying and sending documents containing information that is unique and of commercial value should be limited to situations where it is necessary.
All documents containing information that is unique and of commercial value must be clearly marked as CONFIDENTIAL and that the contents are proprietary information of the company.
All employees that are given access to unique information of commercial value must sign a non-disclosure agreement (NDA) before access is given.
Sharing of information that is unique and of commercial value with third parties such as customers, external advisors, potential investors etc. should be limited to situations where it is strictly necessary. Before any such information is shared with a third-party the company must ensure that the third party signs a NDA, where the third party inter alia undertakes to treat the information as confidential, to only use the information for the specific purpose set out in the NDA and to delete all received information when the purpose is completed or at a certain point of time.
Information that fulfils the following requirements is protected under the law as trade secrets:
the information is secret in the sense that it is not generally known among or readily accessible to persons within the circles that normally deal with the kind of information in question;
the information has commercial value because it is secret; and
the information has been subject to reasonable measures, by the holder, to keep it secret.
From the above definition trade secrets comprise various information of crucial importance to a company, e.g. information regarding the composition or manufacturing process of products, assemblies of knowhow that are used in R&D and innovative activities, market information and information regarding a company’s strategy. The essence is that trade secrets are any information that has commercial value because it is secret and consequently constitutes the unique knowledge of a company.