Protecting Trade Secrets and Confidential Information During and After the COVID-19 Pandemic

Dear Clients and Friends:

We hope you all remain healthy and safe. We are writing about keeping your organization’s trade secrets and confidential information safe as well.

You undoubtedly have had to develop new and different solutions for problems created by the COVID-19 pandemic.  For many of you, those solutions have included having some or all of your workforce work remotely and, for those still physically reporting to work, some may have staggered shifts with less supervision. These new and evolving work environments present challenges for protecting your valuable confidential information. This is a good time to ensure basic measures are in place to protect confidentiality, and some new strategies for protecting information also may be appropriate.

First, as a reminder, what are trade secrets and how do they differ from general confidential information?  To be a legally-protectable trade secret, information must:

  • Be secret, not generally known, and not ascertainable by reasonable means;
  • Have some economic value through being secret; and
  • Be protected through reasonable measures to preserve confidentiality.

Examples of trade secrets might include chemical formulas, financial information, and certain types of customer information. Taking reasonable measures to protect trade secrets is critical at all times and is especially important now.  If you don’t take measures to protect confidentiality, the information may easily be misappropriated and you could be left without a remedy as unprotected information loses trade secret status and the benefit of trade secret laws.

The following steps should be taken to protect confidential information and trade secrets:

  • Non-Disclosure Agreements with Employees: Have all employees with access to confidential information sign a non-disclosure agreement.  NDAs help employees to understand their obligations and create binding contracts on which you can rely if any employee tries to improperly use or disclose confidential information. Those obligations apply whether the employee is working in the office or remotely, providing flexible protection which is so important in these current times.
  • Non-Disclosure Agreements with Others: Non-employees with access to confidential information also should sign NDAs.  Depending on your business, this may include customers, joint venturers, vendors, independent contractors/consultants, and anyone else who may have access to confidential information.
  • Confidentiality & Remote Work Policies: Although policies alone are not enough since they are not enforceable agreements they serve as important reminders to employees of their responsibilities for confidential information regardless of where they may be working and procedures, they must follow to protect confidentiality. For example, require employees to use a secure VPN or other secure means of accessing information while working remotely, and require employees to leave confidential information on your network – and not copy confidential information to their own desktop or other device. Work with your IT professionals to be smart on these issues and anticipate and address problems.
  • Restrict Access: Only those with a need to know should have access to confidential information. Use proper security for electronic information so that it is not generally available, and same thing for hard copies, keeping them in locked offices or cabinets, etc.  Individuals should not be able to just walk out the door (literally or electronically) with confidential information.
  • Label Confidential Information: As simple as it sounds, labelling can make a difference as it serves as a reminder to employees of the sensitive nature of the information and is an additional measure to demonstrate your efforts to protect the information.
  • Exit Interviews: Remind departing employees of their obligations under NDAs, and take measures to recover any confidential information in departing employees’ possession. Ensure that access to your offices, networks, and other electronic information is terminated.

We hope you find this overview helpful. If you have any questions, please feel free to reach out to us.  As many of you know from having been in touch, we are fully accessible via email, phone, and video conference, and look forward to connecting with you now as well as continuing to work with you in a more normalized, post-Covid-19 business environment.


Cook Little & Sheehan Phinney

Cook Little is pleased to announce that we have joined the business law firm, Sheehan Phinney.