Safeguarding Valuable But Intangible Assets

If you are the owner of a small to medium-sized business, you have likely taken measures to protect your real property and other personal tangible assets from creditors and other types of loss. You may not have given the same attention to protecting your intellectual property. You may not even realize that you have intellectual property and that it can be legally protected from theft and misappropriation.

Intellectual Property

Intellectual property is a broad term that covers several types of intangible property, including patents, trademarks, copyrighted material and trade secrets. It can even include a novel idea or a manufacturing process unique to your business. Each type of intellectual property is subject to a different type of protection. Federal or state laws may apply depending on the type of property requiring protection.

Trade Secrets

A trade secret is one form of intellectual property. It may be a formula or process as well as a specific design or body of information that your business has developed and that you want to keep secret to maintain an economic advantage over your competitors. Examples of trade secrets include the recipe for Coca-Cola or Kentucky Fried Chicken. Methods of trade secret protection include:

  • Nondisclosure agreements — You as the employer can require employees to sign nondisclosure agreements as a condition of their employment. These agreements prevent employees from revealing any trade secret they learn from their employment. Nondisclosure agreements are enforceable for the duration of the person's employment as well as after employment is terminated. A nondisclosure agreement has no expiration period and can be enforced indefinitely.
  • Noncompete clauses — You as the employer can require employees to sign noncompete clauses, which prevent employees from taking any trade secrets away from their employment. They cannot use trade secrets at another business or in their own business in competition with your business. This prevents, among other things, sales personnel from taking a client or customer list with them for use at a new job.

Find Out How We Can Protect Your Business

There are other ways for your business to protect its intellectual property. Both federal and state laws must be followed. If you believe your intellectual property has been misappropriated or you want to draft noncompete or nondisclosure clauses, contact our business law firm, R.D. Brown, PLC. Russell Brown is an accomplished attorney with more than two decades of experience in law and business. Call 734-887-6497 for your free initial consultation or send us an email to learn more.