When you think about protecting your business, you might first think of installing an SSL certificate on your website or a security system at your store. However, there’s another type of security you should keep in mind. Every company involves confidential information and trade secrets that are essential to the function of your business.
Without adequately protecting this intellectual property, you’re just as vulnerable as your insecure website or store. Your business’s intellectual property includes everything from your marketing research and subsequent plan to financial reports and analyses to brand kits and designs.
You probably also have a mailing list, CRM, and other databases that are vulnerable to theft or exploitation. Plus, there’s your basic business concept and all the collateral you have to support it. Unauthorized access to this information would give your competitors a big step up and potentially derail your business.
How can you protect your hard work from competitors — or even unscrupulous employees? Here are some options to consider.
Restrictive Covenant
All your employees should sign some sort of contract that restricts their ability to compete against you. These contracts often entail so-called “non-compete” agreements that prohibit your employee from also working for your competitor. Other restrictive covenants include confidentiality contracts and non-disclosure agreements (NDAs). Unfortunately, how enforceable these covenants are varies by state law. It can also be hard to prove intent to compete or that the information considered confidential is indeed protectable.
To be construed as a protectable interest, the information has to be tied directly to a business need. For that reason, an employee often cannot be considered to have broken a restrictive covenant if they also work for a company for which there is no evidence of direct competition, or if they share information that’s not essential to the competitive advantage of the business.
Invention Assignment Agreement
If your employees are creating unique content or designs for you — anything from engineering to sales strategies to art to the written word — you should have them sign an invention assignment agreement. Under U.S. intellectual property law, the creator of any creative work automatically owns the copyright to that work.
That can make it challenging for you if you regularly use assets created by your employees to promote your business. What happens if one of them leaves the company? If they retain the right to their work, that could get tricky for you.
An invention assignment agreement can do one or both of the following: transfer ownership of the intellectual property to you and your business and/or grant you rights to reproduce the material for business purposes. This helps protect your investment in the creative who produced the intellectual property that you need to run and promote your business.
Computer Data Encryption
These days, it’s easy for hackers to obtain access to unsecured drives, especially now that everything is based in the cloud. Be cautious about where you store sensitive data. Often, cloud-based locations such as Dropbox are not secure, especially if multiple employees have access to a shared account.
By investing in password-protected external drives that offer data encryption, you can ensure a safe, secure location to store your trade secrets and confidential information. You should also make sure that your IT department is restricting access to sensitive information and running secure backups of all data.
Implement restricted-access systems and use data encryption software to prevent employees from accessing any confidential information that they don’t need to perform their duties. All exiting employees should have access to sensitive information immediately terminated.
Wrapping Up
When developing your security systems, don’t neglect your intellectual property and business data. These are prime targets for unscrupulous employees, disgruntled ex-employees, third-party hackers, and your competitors. Unauthorized access to or sharing of this information can be highly detrimental to your business’s function and competitiveness.
