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Take smart actions now to protect the intellectual property of your small business from employees

Small businesses need employees. And, because a small business is, well, small, employees can learn a lot about the way the small business conducts its business. A small business owner or entrepreneur will want to provide some protection from employees stealing the ideas of the small business and taking them to another company. These ideas that need protecting include business plans, strategic plans, financial plans, customer lists, know-how, manufacturing processes, inventions and other trade secrets.

Important Tip Employment agreements and protections are always best when they are entered into at the time an employee starts working for the small business - not later and especially not when they have already threatened to leave.

Trade Secrets

The best way of course is to keep your business ideas and contacts as trade secrets. Trade secrets can be protected if an owner has taken reasonable steps to protect them. These reasonable steps would include:

Avoid Disclosing. Not sharing trade secrets with anyone unless absolutely necessary. Some trade secrets should even be kept from employees — so, for example, maybe sharing of the small businesses' customer lists should be limited, recipes could be guarded, etc.

Confidentiality or Non-Disclosure Agreements. Providing a written agreement with employees, vendors, suppliers and, in some case, customers, not to share trade secrets that they may learn with anyone else and to keep things confidential.

Non-Competition Agreements

In some cases, non-competition agreements should be entered into with employees. Although they are somewhat difficult to enforce, they are appropriate in most cases.

Non-Solicitation Agreements

Small businesses should also require employees to sign non-solicitation agreements to keep them from taking employees with them. They should also sign agreements restricting them from using customer lists or soliciting customers after they have left the small business where the customer lists or customers are trade secrets of the small business.

Patents

For a long time, patents for business methods or business ideas were extremely rare. Increasingly, the U.S. Patent Office is granting patents for business methods, particularly around the internet or other high-tech applications. If the small business has a particularly useful, novel and non-obvious business method, patent protection should be considered.

Additional Information
Important Tip: 
Employment agreements and protections are always best when they are entered into at the time an employee starts working for the small business - not later and especially not when they have already threatened to leave.
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Protecting your Business