As a small business owner, you will know that your continued success depends to a large extent on your ability to prevent replication by competitors and harm from third parties.
Building up your business requires a laser-like focus on the secret ingredients that make your business unique. These secrets may take many shapes and forms, but they all help in moulding your source of competitive advantage. If this is lost, it can be difficult to recreate.
Therefore, it is in your interests to pay close attention to the protection of these business secrets.
Ashley Gurr a commercial and contract lawyer at LawBite explores the topic of business secrets and the practical, organisational and legal protections that may be available to you in the quest for confidentiality.
Which business secrets might I seek to protect?
Whilst many similarities may exist between different businesses, each one will have its own distinct make-up. No two businesses are identical. As such, you can think of each business as having a kind of ‘DNA’.
You should think about what comprises your business’s DNA – what are the fundamental underlying features and characteristics that make your business unique?
Your business DNA will likely be underpinned by a range of confidential and commercially sensitive information, documents, know-how, databases, contacts, financial and pricing models and other business secrets.
Since these confidential aspects are at the heartbeat of your business, they should be guarded appropriately having regard to their importance.
What steps can I take internally?
One of the key measures you can take to protect your business secrets is to focus on sensible risk-reduction methods at an internal, organisational level.
In short, making commercially sensitive information, documentation, data and know-how available on a strictly ‘need to know’ basis.
Even as a smaller business, appropriate steps can be made to allow access to only a small team of trusted individuals, with those further down the organisation having more restricted access.
You should ensure that all your employment contracts have appropriate confidentiality clauses to protect your business. It is vital that your employees understand the severity and consequences of leaking business secrets to others.
Alongside the contracts of employment, you can further safeguard your business by issuing a series of modern policies designed at limiting business risk and adverse or unintended disclosure, such as an IT and Communication Systems policy, a Bring Your Own Device to Work (BYOD) policy, a Data Protection policy and a Social Media Policy, etc.
It’s critical that you train your employees to recognise threats to the company from the wrong people getting their hands on sensitive information.
This should be a regular feature of your training programme. The training can be brought in as part of the policy regime as outlined above.
What about external threats?
Whenever you are engaging with a new supplier, or you are entering into any discussions with competitors or any other third parties, it is highly recommended that you have in place robust confidentiality terms.
These terms can be in the form of a stand-alone Confidentiality Agreement or Non-Disclosure Agreement (NDA) or as part of a wider commercial agreement between you.
The key point to consider here is that any disclosure of business secrets can place your business at risk, even if that disclosure is necessary to achieve a wider commercial purpose, such as the launch of a special project or a new joint venture, etc.
Since these types of agreements are becoming increasingly commonplace in the world of business, it is unlikely they will be met with much resistance, providing of course the terms are fair and reasonable in the circumstances.
If you would like advice and support with regards to confidentiality in business, or drafting a suitable NDA, you should reach out to one of the commercial lawyers at LawBite. If you’re an early-stage company, they can also advise you on how to protect a business idea.
LawBite has experienced lawyers, we are friendly and can help you with all commercial, corporate and employment legal matters. We have successfully handled tens of thousands of enquiries from SMEs and are proud of our 98% positive feedback rating.
About the author
Ashley Gurr is a commercial and contract lawyer at LawBite. Ashley has over 15 years of experience in private practice helping SMEs and in-house for an international consultancy group advising on commercial agreements and a multi-national utility giant in a contract strategy role.