Once answering the above questions the process of protecting trade secrets continues with the development of a trade secret security package. Utilizing written security agreements are the keystones to effective trade secret security. Such agreements take a variety of forms and should include employee training. The reasons for having such agreements are (1) the quantify in potentially ambiguous situations the fact that information is being disclosed, used or developed in the context of a confidential relationship, (2) the agreements clearly and quickly put the recipient on notice that security is being imposed on proprietary information, and (3) that the agreements may where appropriate provide a method for settling disputes by a selected dispute mechanism. The most frequently used security agreements are:

Employee confidentiality agreement: This agreement typically provides that it the employee may not disclose a company’s trade secrets during and after employment. Each employee likely to have access to the company’s proprietary information should execute such an agreement. These employees should be carefully cautioned as to the trade secret status of projects on which they work. This caution should be exercised not only when the employee begins working for the company, but also when (s)he changes jobs within the company, when (s)he develops any new concepts, or when (s)he works on any new trade secret projects.

Confidentiality legends: If the company needs to disclose its proprietary information to other entities, such as parts or equipment suppliers, any documentary material disclosing trade secrets should be clearly stamped with an appropriate confidentiality legend. Materials needing clear legends include plans, engineering drawings, designs, specifications, computer programs, manuals, QC standards and procedures, etc.

Third-party confidentiality relationships: Two approaches should be considered in making disclosure of the company’s proprietary information to third parties, depending upon the importance of this proprietary information to the company, its prior relationship with the supplier, and the company’s bargaining strength. First the company can simply provide the materials to the supplier with a cover letter setting forth the work to be performed within with certain provisos. Among them: that the materials being provided by the company are confidential and are being submitted to the supplier solely for use on behalf of the company in performing of this work. Such letter should seek written acknowledgment that the supplier has in fact received the materials. Sending shipments by certified mail or overnight courier service is another alternative for establishing receipt of the materials, including the cover letter. Secondly the company can insist that a supplier sign a confidentiality agreement before any trade secrets are disclosed to it.

The first approach is far more acceptable to third-party suppliers, many of whom are unwilling to supply parts or equipment where they must first sign confidentiality agreements. Although this approach does not obligate the supplier in writing to honor the company’s trade secrets, as a matter of course, most reputable suppliers will do so. Furthermore the courts may be willing to imply an obligation of confidentiality in such circumstances.

Advantages of the second approaches are that it expressly imposes upon the supplier the obligation not to improperly disclose or use a company’s trade secrets. The company might wish to use this approach where it has superior bargaining strength, where the proprietary information reduce close is particularly valuable, board has questions about supplier’s reputation for honesty and fair dealing.