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How can you keep your trade secrets safe when outsourcing?

On Behalf of | Feb 14, 2022 | Trade Secrets |

Outsourcing certain aspects of your business has some benefits like cutting costs and increasing operational efficiency. However, it may come at a cost. For example, your trade secrets may be exposed to the outsourcing company, which may affect you if such information falls into the wrong hands.

Since you may have to outsource at some point, it is crucial to safeguard your business interests, including trade secrets.

Safeguarding your trade secrets

As a business, you need to be proactive in safeguarding your trade secrets. They could be what sets you apart and give you a competitive edge over other players in the industry.  

When you decide to outsource, it is up to you to conduct due diligence. What is their history? Do they work with your competitors? In addition, you need to vet the company’s internal systems and ensure that your confidential information will be safe. 

You should also consider having a Non-Disclosure Agreement (NDA) as part of the deal, especially if the vendor is likely to interact with critical information. Other measures you may take include:

  • Ensuring secure communication channels between your company and the outsourcing partner
  • Limiting the number of people who come into contact with sensitive data
  • Regularly monitoring your interaction with the vendor for any breaches or risk 

It may not be easy to get everything right, and you should be prepared to deal with any eventuality.

Protecting your business

Sometimes, even the best practices are not enough to protect trade secrets when third parties are involved. Anything could go wrong and your trade secrets may be exposed.

Knowing what to do if your outsourcing partner discloses or steals your intellectual property will ensure that you protect your rights and possibly, recover any financial losses suffered as a result.