What Is A Trade Secret?
A “trade secret” is a little like McDonald’s “special sauce” or Kentucky Fried Chicken’s “11 secret spices.” For a fast food restaurant, it’s an ingredient or recipe–for a real estate agent, it might be a sales formula or lead-generation system. In the Fortune 500 context, Tesla’s new battery technology or Google’s map-making software are all likely trade secrets. Put another way, a trade secret is the aspect of your business that sets it apart from your competitors. In a very real sense, the loss of a trade secret could mean the difference between life or death for your business.
Why Does Mine Need “Protection?”
Today, people rarely keep their jobs for as long as their parents did. In contemporary America, employees move easily between competitors. This phenomenon, coupled with the increasing digitalization of record keeping, has lead to a virtual explosion of criminal investigations and private lawsuits involving the theft of trade secrets.
The most high profile example of this in recent years is probably the Apple v. Google lawsuit. After Apple rolled out the iPhone, several high ranking Apple executives and engineers left that company for similar positions with Google. Within a year, Apple wasn’t the only technology giant building a smartphone. Steve Jobs, the late CEO of Apple, famously called Google’s Android operating system a “stolen product.” That case settled in 2014 for an undisclosed amount, though industry analysts speculate the agreement could have involved a nearly billion-dollar cash exchange.
According to a 2014 Trustwave Global Security report–one of the leading analysis firms on data security issues–over 70% of data breaches go undetected by the victim company. In short, because most organizations keep their information in easily hacked web-based storage systems, and because employees are more mobile than ever, there has been has a significant and worrying increase in the theft of trade secrets.
How Do I Protect My Trade Secrets?
The American Bar Association has publicized 8 common and effective strategies businesses employ to protect their private information. These 8 strategies were adapted from materials produced by Pamela S. Passman, an executive at the Washington, D.C.-based Center for Responsible Enterprise and Trade, a think tank specializing in data-security issues.
- Identify what information might qualify as a “trade secret,” no system intended to protect your information can function properly without first understanding the particular requirements of your situation.
- Secure all publicly accessible workstations, computers, and wireless networks. Ensure areas where private information is stored, like server rooms, are consistently monitored and protected by physical security protocols like digital-ID readers and others.
- Implement strict data security protocols, and police employee compliance with these protocols. Data security experts suggest a proactive approach when dealing with private information.
- Develop an information protection “network,” by identifying each of the members of your team who are in charge of overseeing data-security issues in their specific areas. These aren’t always tech people, they could be middle-level managers or human resources staff.
- Bring in outside specialists to analyze your organization’s data-security weak spots, and implement new protocols based on their findings.
- Monitor sensitive areas and departments for compliance.
- Manage third-party contractors and other non-employee partners more carefully, be particularly aware of outsiders when they are working with or near your sensitive information.
- Institute non-disclosure agreements and other legal tools used to ensure employee compliance with data-security protocols even after those employees leave your organization or are terminated.
Never Hesitate To Consult With An Expert
If you need assistance developing a data-security plan, particularly one involving legal instruments like non-disclosure and non-compete agreements–be sure to hire a firm that employs specialists focused on prosecuting cases for theft of trade secrets, like those at the Principal Firm. If you need help pursuing a thief or protecting your business, contact our intellectual property and trade secret specialists at (407) 322-3003 today!
