One of the challenges with inventorying trade secrets is that they often have little or no physical presence. Instead, they tend to reside in the minds of employees, hide in documents, or are embodied in products, machines, and/or software.
Typically, trade secrets are inventoried on a departmental or functional basis. That is, each department or function of the company is responsible for listing all its “crown jewel” trade secrets. Then, each of those trade secrets is described and categorized.
Importantly, there is no need to identify every single trade secret or to describe any secret in a hyper-detailed manner. Instead, the goal is to identify collections or categories of confidential information that provide your company with competitive advantages. One well-regarded approach to categorizing and describing trade secrets is the Subject-Format-Product (or “SFP”) approach. This approach labels each trade secret according to its general subject matter, the format in which that trade secret is recorded, and the product (or machine or software) with which it is most closely associated.
Here are a few example SFPs that hopefully clarify the approach:
- “Troubleshooting Flowchart for Variable Speed Drive Circuits” (where “Troubleshooting” is the general subject matter, “Flowchart” is the format, and “Variable Speed Drive Circuits” are the product)
- “Mitochondrial Uptake Experiment Results for R-777 Polypeptide”
- “Equipment Specification for Micro-housing Press”
- “Point-of-Sale Packaging Drawing for PERFECTO® Razor Blades”
- “Sales Projections for SURE-FIRE® Rapid Insulin Injectors”
- “Middleware Description for EagleView Security Software”
- “Training Data for Loan Analysis Chatbot/Large Language Model”
SFPs can provide convenient categories into which to bunch your company’s trade secrets, and many, if not nearly everyone, in your company will instantly recognize what each SFP relates to.
Once categorized, a given trade secret can be sequentially numbered and possibly elaborated upon in terms of its problem, goal, and/or objective; idea, concept, and/or solution; and specific implementations. If known and/or relevant, the secret’s creation date and/or creator(s) can be identified. Keywords can be assigned to the secret to make it easier to find when your inventory is searched. You also can add notes as desired to the record for any secret. Consider including the name of the person responsible for monitoring this trade secret, and the date of the last review of the record.
Trade secrets can then be further characterized to better understand their potential value to your company and/or others.
Finally, be sure to log what secrecy measures have been taken to protect the secret, and what measures reasonably should be taken.
By taking stock, your company will be much better positioned to track, secure, valuate, assess the patentability of, exploit, and enforce each of its trade secrets.