Intellectual property, whether in the form of source code, manufacturing techniques, or customer data, is crucial to a successful business in a competitive industry. Lately, business news has been filled with stories of companies accusing competitors of having stolen trade secrets. These legal battles, seen through flashy newspaper headlines, are often what first come to mind when discussing trade secrets, but it is just as important to consider the steps a company can take to minimize the risk of misappropriation in the first place. Trade secret lawsuits are legal recourses that can be taken after a company’s intellectual property has already been violated, but proactive, preventative measures taken to protect trade secrets can be an even more effective way to maintain a proprietary competitive advantage.

You can and should take steps to minimize risk associated with your intellectual property before any misappropriation occurs, and the first step to accomplish that is to identify what trade secrets you possess and need to protect. The precise legal standard of what constitutes a trade secret varies by jurisdiction, but three basic elements are always involved: it must have value, it must not be publicly known, and it must be treated as a secret. A trade secret can be a specific product design or source code, but it can also be a method or technique important to making your product competitive on the market. In a trade secret lawsuit, the owner of the trade secret must show its value and the effect that its misappropriation has on the owner’s business. Therefore, a trade secret is preferably something you can directly tie to your company’s success and profits and something whose effect on your profits you can reasonably estimate. A jury can decide that trade secret misappropriation occurred but award no damages for it, as T-Mobile discovered last May at the culmination of a two-and-a-half-year lawsuit against smartphone manufacturer Huawei. If your trade secret does not have value, it will be difficult to find financial proof that the trade secret theft hurt the company, and may prove difficult to get legal recourse if misappropriation occurs.

A trade secret must also be something that you can show is secret to your company

and is not generally known by other individuals in the field. For example, a company that sells task management software would find it difficult to argue that using check boxes to mark completed tasks is a trade secret, since this is a well-known feature used in nearly all to-do lists. However, the same company could argue that their trade secret is the proprietary implementation of these check boxes that allow them to be automatically marked as completed when an email referencing the completion of the task is sent.

Not all threats to intellectual property are external, and it is just as important prevent unauthorized access to your trade secrets from within your company as from external sources

Once you have identified what your trade secrets are, it is important to take steps to maintain their secrecy. This includes legal actions, such as having specific non-disclosure agreements and non-compete clauses in place for all employees and vendors that interact with the trade secret, as well as enhancing physical and electronic security, such as restricting access to trade secret materials.

With clear contracts in place for your employees and any third parties that may need to access all or part of your trade secrets, you can have more direct legal recourse if any misappropriation occurs. In any situation where some of your trade secret may be revealed, it is prudent to take legal steps before any material is exchanged. In general, pay attention to what information about your product is shared with others, whether in marketing products to the public or at technology conferences to others in your field, in order to prevent any trade secret information from being inadvertently revealed. If any employees are preparing a presentation about your product, they should be aware of how much they are and are not allowed to legally disclose.

It is also important to implement common-sense security measures to prevent unauthorized access to your trade secrets. Keep any source code or other electronic materials on a secure network that can only be accessed by authorized employees, and keep any physical materials such as design documents in a securely locked safe or room. In addition, make sure to review your general security measures and have your systems regularly evaluated for cyber security risks.

Not all threats to intellectual property are external, of course, and it is just as important prevent unauthorized access to your trade secrets from within your company as from without. One of the most straightforward ways to keep some one from misusing your intellectual property is to prevent them from accessing it in the first place. The fewer people have access to confidential material, the easier it can be to control that access. Therefore, only those employees for whom it is absolutely necessary to have access to trade secret information should have that access. This can be controlled through workstations accessible through two-factor authorization, directory-specific access-control lists that restrict which accounts may access particular directories on a computer, or restricted office space accessible to only particular employees.

It is important to understand the legal recourses that your jurisdiction offers and to be prepared to take those legal steps if necessary. All of these preventative measures are intended to minimize the risk of trade secret misappropriation, but they also can improve the strength and effectiveness of legal actions should something go wrong. After all, no risk can be entirely eliminated.