Trade secrets consist of non-public information that provides a business with a competitive advantage. Trade secrets can include recipes, specific production practices, vendor lists and client lists.
Business leaders generally need to take steps to protect their company’s intellectual property, including trade secrets. Outside parties, such as vendors and service providers, may have partial access to a company’s trade secrets. Contracts and litigation can both play a role in protecting an organization’s trade secrets accordingly.
How contracts help
Vendor and service provider contracts can include nondisclosure agreements. Also known as confidentiality agreements, nondisclosure agreements prevent an individual or business from releasing non-public information or using confidential information for the benefit of an outside business.
While people often think of these agreements as part of an employment arrangement, they can also be important when a company relies on vendors and service providers. These agreements strengthen the right of companies to take legal action after the release or misuse of trade secrets.
How litigation helps
Legal action brought against a vendor or service provider can prevent the continued release or misuse of trade secrets. Judges can issue injunctions to protect a company when an outside party has accessed trade secrets through business relationships.
Judges can also potentially award damages in cases where the release of trade secrets causes verifiable economic harm. If there is a nondisclosure agreement in place, the courts can help enforce that agreement, including any consequences imposed by the contract.
Working with a business litigation attorney when drafting or reviewing contracts can help companies protect some of their most valuable resources. A lawyer may also be critical to the success of business litigation pursued due to the misuse or disclosure of trade secrets.