LIVE CHAT INSTANT MESSENGER BOOKMARK
 
 
BLOGS   WRITE NEW BLOG  
RSS
Trade Secret
Posted On 11/28/2019 07:52:14 by chloebailey

Keeping confidentiality is an essential issue in the modern business world. Employers set their sights on maintaining the secrecy of the valuable information. It gives them the possibility to be competitive in their markets and have a stable economic value of their products and processes. Keeping trade secrets is an important direction if managerial work, which requires developing strategies for making the information, remains confidential.

The term “trade secret” refers to the topic of social responsibility. The generally understood meaning of this concept is the following: there is definite confidential information, which gives benefits to some parties. If the information is disclosed, the economic value decreases.

The Economic Espionage Act of 1996 gives the most exact explanation of this term. According to this document, it is identified as the information which can be represented in different forms such as formulas, procedures, plans, documents, etc. This document also defines that the information must not necessarily be written but can be memorized; even this way it can be defined as a “trade secret”. The owner must keep this information secret. The most important point of the definition given by the Economic Espionage Act of 1996 is that information has a definite economic value and can lose it if it will be disclosed to the public.

The information or knowledge developed by a firm can be justifiably claimed as a trade secret if it is valuable for the company and its loss may have negative consequences for the company`s competitiveness in the market. The information is also considered a trade secret if it costs an employer a certain amount of material resources to create it. For example, to create a new computer algorithm, a firm has hired highly paid qualified specialists, and disclosure of this algorithm will lead to losing all the benefits of the new product by the company.

The company management must make efforts to keep such information secret because in most cases, the government does not protect the confidentiality of the internal information of the firm. However, if the declared trade secrets are disclosed, the matter may be solved in court.

Companies have to use different strategies to protect their confidential information. The following are some measures that can be useful to keep the information secret. It is worth presenting them one by one.

1. The first and most important rule is indicating what information is and what is not believed to be confidential. It is important because employees may disclose the information accidentally, without knowing its importance. The best way to prevent this is to mark the important documents with the sign “Confidential” or even with a short description of the legal consequences for the employee, who steals, discloses or duplicates this file. This simple action will lead to people`s thinking first before doing anything with indicated documents.

2. The next rule is based on the idea that all the documents which the company believes to be confidential must not be in free usage. Only a limited number of people must have access to it. Otherwise, keeping a secret will be very difficult. The smaller the number of people knows about it, the better it is. It is necessary to limit access to the information in either a physical or electronic way. It may be simply placing all the important documents in one locked room or, similarly, creating electronic storage that can be available for certain employees only. The management can take more precautions and monitor people who have access to confidential information. It can be made with the help of log-in systems. They will allow the company management to be confident that no third party accessed the information from its storage. However, this way is not too effective because it does not guarantee the safety and takes much time.

3. One more important strategic step that a company can make to protect its trade secrets is signing confidentiality agreements with all the employees. A confidential agreement is a contract between an employer and an employee, which enumerates the information that is supposed to be a trade secret and states that they agree not to disclose the information to the third parties. Both parties sign the agreement afterward it becomes valid. Breaking the confidential agreement can lead to legal consequences defined in The Economic Espionage Act of 1996. According to it, the person who breaks the agreement may be fined (the amount depends on the loss of the company) or sent to prison (again the term depends on the case). Signing confidential agreements is a very effective step towards non-disclosure of a company`s trade secrets.

4. Companies should always keep in mind that much information is disclosed after employees leave the company. That is why it is important to have conversations with departing workers to pay attention to their obligations of confidentiality. It will be useful to state that confidentiality agreements continue being valid even after the employee changes his/her job.

5. All the important papers and electronic resources that are no longer in use must be destroyed. Shredding is used for papers while for electronic resources it is enough to delete them from all the storage places.

Despite the discussed strategy, there still exist many problems with maintaining secrecy. The main threats to intellectual property are now economic espionage, especially cyber one. It is worth discussing these threats in detail. Economic espionage is the form of commercial espionage that is performed by oppositional governments or corporations. Some experts give an example of this kind of espionage illustrating the case of Intel Corporation, the employee of which was going to sell the highly valuable secret of the company to its opponent. It was fortunate that the corporation has managed to prevent the disclosure; otherwise, the loss would be critical. The author also discusses other countries` efforts to break the US economy by maintaining confidential information.

Cyber espionage is a modern way of the economic one. The main idea is that the confidential information is accessed by the opponent not with the help of employees but with the malicious software that is installed on the necessary computer. The development of modern technologies has allowed computer hackers to practice the following scheme. The owner of the computer, where the confidential information is supposedly located, receives some e-mail with a link. If he follows this link, malicious software gets inconspicuously installed on the computer and then it functions as the instrument that transmits the information from one user to another. The owner of the trade secret can be fully unaware of the disclosure in this case. Cyber espionage is a real threat to keeping confidentiality since there are still no effective measures that can help to fight malicious software. While hired developers are trying to adapt to existing threats, new technologies that are disastrous for maintaining secrecy appear. Therefore, the quick development of information technology has its disadvantages because these technologies are used to damage private and corporate rights.

They discussed threats that are dangerous mostly for large corporations and governmental units. As for the smaller companies, it is usually enough to follow the common privacy policy (signing confidentiality agreements, destroying papers, marking the information “Confidential”, etc.) to feel secure. The reason is that the creation and usage of malicious software are very expensive, and this solution is implemented only in case the disclosure promises much more profits.

The effective management of the company includes managing people and information. The first suppose getting the right people, making them efficient, supervising, etc. The second involves organizing the information exchange between these people. This information exchange is often useful for the company's needs only if it is confidential. Making the information public during this exchange can lead to the loss of its value. Therefore, understanding the main principles of keeping trade secrets is necessary for becoming an effective manager. For making a good article like this follow all article writing tips and rules. 

In conclusion, it is necessary to state that keeping trade secrets is the important direction of managerial work that can save the company from negative consequences. Almost any company has trade secrets. They make companies benefit, and the loss of the confidential information is often unbearable and may even lead to the company`s extinction. That is why it is important to protect all significant information, the loss of which can decrease the economic value of the company. To protect this information, companies use different strategies, including the following: stating what information is confidential; limiting access to this data; signing confidentiality agreements with employees; having conversations with employees who are leaving the company, and destroying the unnecessary documents. These precautions are mostly not too difficult to perform; moreover, many small companies and big corporations have already proved their effectiveness.

 

Tags: Secret Essay Trade



Bookmark:



Business Blogs
Top Sites
10 c2c ACTIVITIES: UPDATES & NOTICES
Start Time:

EVERY DAY!

Invite Others to JOIN Click 'n Connect Clubs and start making money!

If you are a paid Subscriber, you will make $1.00 EVERY MONTH FOR THE FULL DURATION that EACH new Member who YOU refer is subscribed to Click 'n Connect Clubs!

Start making BIG BUCKS today by inviting ALL your business associates and friends!!

Have questions? Ask the admin at: c2cadmin


 

© 2009 ClickandConnectClubs