While companies are starting to better appreciate the role trade secrets can play in underpinning their intellectual capital, proactive trade secret management is still a very much neglected activity. This neglect can ultimately lead to the loss of valuable trade secrets and the loss of millions of dollars of value and legal fees. The widespread failure of many companies to take reasonable steps to protect their information should give managers and their company directors much pause. Fortunately, the law is starting to provide a clearer picture of what needs to be done, and there are many providers well versed in both best practices and productivity tools that will enhance a company’s trade secret protections. Read more
While not always possible given local labor laws, to the extent possible, the company should require the manufacturer to adopt protocols to govern a termination of the manufacturer’s employees in a manner that minimizes the risk of the employees taking confidential information with them when they leave the manufacturer. These may include:
I am very pleased that the white paper I wrote with Donal O’Connell on Trade Secret Audits from Practical Law of Westlaw was published in its Publication, “The Journal” – (so to be available on line at https://content.next.westlaw.com/Browse/Home/PracticalLaw/PracticalLawTheJournal?contextData=%28sc.Default%29&transitionType=DefaultTB_AugSept19_Feature (002)
I am delighted that a short paper of mine (co-authored with Donal O’Connell) on the subject of ‘Trade Secret Theft in China’ has been posted on the IP Strategy blog. The paper briefly explains trade secrets before then describing the various scenarios in which foreign companies may find themselves. We suggest that some of the scenarios described are clear examples of trade secret theft but others less so, if not at all. Any and all feedback is most welcome.
by David Cohen and Donal O’Connell
While the laws governing trade secrets differ slightly from country-to-country, common among nearly all these laws is that a trade secret is any information that is:
- Not generally known to the relevant business circles or to the public. The information should also not be readily accessible.
- Confers some sort of economic benefit on its owner. This benefit must derive specifically from the fact that it is not generally known, and not just from the value of the information itself. It must have commercial value because it is a secret. Commercial value encompasses potential as well as actual value.
- It must have been subject to reasonable steps by the rightful holder of the information to keep it secret. What is reasonable can vary depending on the specific circumstances.
A trade secret continues for as long as the information is maintained as a trade secret. However, information may no longer be considered a trade secret once it becomes easily accessible, is no longer properly protected or has no commercial value.
Trade Secrets Need People to Exist
At first blush an audit sounds expensive, distracting and unnecessary. Let’s face it, we live in the age of the long tail. Over the past few years, things people would have previously given only a remote chance of coming to pass seem to be happening on a regular basis. What’s more, the pace of change and disruption in business and in the personal world is so great, it is almost impossible to keep up. It seems that whatever you are doing today will have to be radically altered very soon. With all this change most of us are running just to stay in place — so any distraction from the daily chores of simply keeping up needs a powerful justification. I would argue however, that the frenetic pace of business life is precisely why audits are so important. Just as mindfulness is rightly understood as being key to a centered life, trade secret audits are essential to continued success as a business. Read more
As we have discussed elsewhere, a trade secret audit or assessment is vital if a company is to protect itself during the outsourced manufacturing process. [See these articles: Trade Secret Audits – Why Bother? ; You’ve Decided to Conduct a Trade Secret Audit. Now What?; You’ve Decided to Conduct a Trade Secret Audit. Now What? Part 2 ] Read more
Donal O’Connell and I are very pleased to announce that Practical Law of Westlaw / Thomson Reuters has published a Practice Note of ours related to trade secret valuation. Click below to view the Practice Note in its entirety.Trade Secret Valuation (W-019-2083)
Donal O’Connell and I are very pleased to announce that Practical Law of Westlaw / Thomson Reuters has published a Practice Note of ours related to trade secret audits. Click below to view the Practice Note in its entirety.Trade Secret Audits