Loss of proprietary info can devastate business

Within every business entity there is proprietary information. This information which often includes customer and client lists, business plans and methods, and pricing information holds tremendous value for a business in a competitive industry. The value of this information diminishes, however, when shared either purposely or inadvertently with competitors.

Businesses, oftentimes without even knowing it, engage in practices and conduct transactions on a daily basis that jeopardize the integrity and value of proprietary material.

So, how do businesses keep material confidential? First and foremost, take proactive measures to safeguard your confidential and proprietary information in order to prevent its devaluation. When possible, keep confidential documents confidential.

Stamp and file them as such and keep them guarded from wandering eyes. In cases when confidential or proprietary information must be shared, there are several legal tools to help you prevent any undesirable dissemination.

The first tool is the noncompete agreement. A noncompete agreement clearly defines the rights and obligations of an employee leaving employment and helps keep the employee from taking competitive information with him.

The second tool, a confidentiality agreement, helps protect the information you disclose. For example, businesses seeking investment capital or going through a merger, sale or acquisition will probably have to make confidential business information available.

The confidentiality agreement keeps private information from being placed in jeopardy by limiting the use of the disclosed information to the immediate business deal.

It also imparts significant penalties for wrongful use of the information.

Other legal safeguards available to protect proprietary information include:

?Written plans of protection. Some information, such as chemical formulas and business methods may be considered trade secrets within the definition of the Uniform Trade Secret Act or the Restatement of Torts. A written plan of protection ensures that trade secret information is adequately protected.

Remember, it is the owner of a trade secret's responsibility to prevent unwanted disclosure, because little can be done to a third party who learns a trade secret without resorting to unfair or illegal methods.

?Patents. Patents should be used to protect inventive devices and processes.

?Copyright laws. Copyright laws provide a relatively inexpensive way to protect the unwanted use of written materials, including drawings, photographs and advertising material.

?Trademarks. Federal trademarks are available to protect names, logos and graphics.

Any and all of these safety measures taken to protect proprietary information should begin with an assessment of the company's confidential and proprietary information. This should include an inventory of all materials which could be harmful in the hands of a competitor and a written plan identifying the steps being taken to preserve the integrity of all confidential information. Revisit the plan occasionally to keep it up to date.

Of course, consult an attorney with your questions on how to best protect your confidential or proprietary information or to assist in an assessment, evaluation and value determination of your proprietary business information.

(Joseph L. Johnson is an attorney with Lathrop & Gage LC in Springfield.)

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