Be careful not to let your trade secrets die with you, or you may accidentally kill your business. If you have a proprietary formula, customer list, or algorithm that gives you your competitive edge, it’s not registered with the government. Its protection relies entirely on secrecy and contracts.
The Horror can be that since there is no government registration, if the owner dies unexpectedly, and the secret formula only exists in their head, written down somewhere no one can find it, or on a single encrypted hard drive no one can access, the entire value of the business can disappear. If there’s no way for the estate’s executor or trustee to retrieve and protect the secret, the core value of the company can vanish overnight.
The Solution is to have a trade secret succession plan.
- For Individuals: Create a secure, sealed protocol that names a trusted successor/trustee who can access the secret only upon documented events, such as death or incapacity.
- For Businesses: Explicitly name the trade secret as an asset in the operating agreement, bylaws, or shareholder agreement (but don’t reveal what it is in those documents); make sure the proper trustworthy business partners or successors know where and how to access the trade secret; and mandate strict confidentiality protocols for all partners and employees.
Intellectual property is one of the most terrifyingly useful tools you have. If you’re a creator or other entrepreneur ready to build a frighteningly powerful brand and business, you need to know how to use it. You don’t have to face the darkness alone, though.
I help entrepreneurs across the U.S. make smart, legally sound decisions about their intellectual property. I’m an attorney in Champaign-Urbana, Illinois, but I serve intellectual property clients nationwide.
If you’d like to consult with me, please book a consultation online at kingpatentlaw.com or by calling my office at 312-596-2222 or 217-714-8558.
Please check out the other posts and pages on my website for more information on intellectual property and business law issues. I’m also on most major podcast platforms as “Know Your Rights: Your Intellectual Property and Business Law Playbook” (video on YouTube, Spotify, and Substack only) and on most social media as @kingpatentlaw.
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