In addition to real estate and equipment, many companies count business information among their most valuable assets.
“Protecting intangible assets varies according to state law,” says A. Patricia Diulus-Myers, a partner with Jackson Lewis LLP. “Pennsylvania courts are amenable to the enforcement of post-employment restrictions on employees’ use and disclosure of business information.”
Smart Business spoke with Diulus-Myers about how businesses can protect their valuable information.
What types of business information is protectable under the law?
Protectable business information includes trade secrets, proprietary information and certain other confidential information. Trade secrets are not generally known in the public domain or easily discoverable by competitors. Courts have found business information — planned acquisitions and divestitures, cost data and customer lists — to be trade secrets, provided that they are subject to adequate protections by the company.
How do trade secrets differ from proprietary and confidential information?
Proprietary information is any information that the company owns. It could be purchased, like computer software and manuals, or developed by the company through the expenditure of its time and expense.
Confidential information is any other information that the company keeps in confidence, including personal information regarding and/or provided by its employees.
What practical steps are recommended for the protection of business information?
Companies should consider both physical and virtual security protections, including keeping highly confidential information under lock and key, stamping documents ‘confidential,’ training employees on the protection of business information, and limiting access to or encrypting sensitive information stored on computers.
What about information used by employees and others who have access?
Companies should clearly set forth in their employee policies, handbooks, codes of conduct and vendor agreements the requirement to maintain the confidentiality of business information. Require that all property and documents obtained during and as a result of employment be returned, except for individual compensation and benefits information. This will avoid any problem with interpretation should litigation ensue.
