Of course it’s impossible to protect against every vulnerability, but corporate leaders still need to take the precautions they can.
“Companies are on the front lines of the battle for trade secrets, they are the victims,” Baker McKenzie’s Lashway says. “They do have an obligation to identify and protect trade secrets. But if a nation state actor has prioritized stealing their trade secrets as part of its national agenda for economic growth, the idea that a company is going to be able to successfully protect itself by itself is challenging to say the least.”
That’s why governments also have an important role to play in protecting trade secrets. The protective measures companies put in place is the first line of defense, but the stronger approach is a combination of corporate action and government enforcement, including governments working together to minimize theft.
“There has been enormous work done globally to bring about collaboration on tackling cyber threats,” Lashway says. The bottom line is that corporate leaders can and should do more to protect their trade secrets and preserve these increasingly important assets. Their future of their companies may depend on it.
“We would encourage CEOs to apply the same focus and attention to protection of trade secrets that they apply to growing their business and meeting quarterly targets,” the US Chamber of Commerce’s Elliot says. Protecting trade secrets is not typically as costly or onerous as protecting other forms of intellectual property because they do not have to be registered with the government. Preserving trade secrets requires that companies, inventory their trade secrets, limit the number of people who know the information, develop technical controls to protect their trade secrets and train employees on the importance of trade secrets. They must also test their controls and implement action plans for responding to threats and actual theft. “Finding the best approach to protection will differ from one company to the next depending on its risk appetite,” Baker McKenzie’s O’Brien says. “But corporate leaders need to take the time to identify their most valuable trade secrets and determine how much their employees understand their importance.” Based on the results of that process, companies are best positioned to choose the most appropriate protective measures to take, from securing computer networks and monitoring employee electronic use to providing training, developing corporate policies, and requiring anyone who comes into contact with trade secrets to sign non-disclosure agreements.
Growing recognition among governments and companies of the importance of trade secrets and the need to protect them is a step in the right direction. But with just 31% of the executives in our survey reporting that their companies inventory their trade secrets and have action plans to respond to potential theft, there is more work to be done.
If a nation state actor has prioritized stealing trade secrets as part of its national agenda for economic growth, the idea that a company is going to be able to successfully protect itself by itself is challenging to say the least.
DAVID LASHWAY, BAKER MCKENZIE
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If trade secrets are a concern, is this reflected in your HR practices (i.e. drafting of employment contracts, monitoring computer downloads, exit interviews etc.)?
WHAT COMPANIES NEED TO DO
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If your company is concerned about trade secret protection, does your company identify and maintain an inventory of its trade secrets and does the company have an action plan for how to respond to actual or threatened misappropriation?
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SUMMARY
KEY FINDINGS
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KEY FINDINGS
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TRADE SECRET THEFT: A TRILLION DOLLAR PROBLEM?
COUNTING THE COST OF THEFT
RISING TRADE SECRET PROTECTIONS IN THE US, EU AND ASIA
WHAT COMPANIES NEED TO DO
CASE STUDY: SCHOTT AG