Suppose one of your key employees leaves your company and goes to work for a competitor. That's bad enough in itself, but what if your former employee takes more than his or her talent and experience? What if that employee knows all your trade secrets: your formulas, suppliers, techniques, customers and contacts?
"In an information-based society, a company's greatest assets take the form not of, say, iron ore fields, but of information," says Robert Linn, an attorney with Cohen & Grigsby in Pittsburgh who specializes in the protection of intellectual property and trade secrets. Failure to protect those secrets, Linn says, can mean the loss of everything from key customers to confidential processes and techniques--the very information that gives your company a competitive edge in the marketplace.
The law treats trade secrets as property, which is illegal to steal. "There's a [growing] recognition of the value of trade secrets," Linn says. "And there's an increasing effort by the courts to fashion rulings allowing companies to retain their trade secrets."
Steven C. Bahls, dean of Capital University Law School in Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane Easter Bahls specializes in business and legal topics.