How Trade Secret Theft Happens To A Company
Spying isn’t restricted to just novels or the movies. Not all thieves work during the dark of night. Economic espionage has increased over sixty percent from 2009 to 2013, claims the FBI, and the frequency of industrial crime hasn’t been falling in the past few years. Instead, trade secret theft has experienced the largest amount of growth out of all the types of traditional espionage cases.
Trade Secrets Defined
Almost every company has something that makes it unique. This might be the company’s most valuable asset, despite being something intangible. It could be a formula, recipe, pattern, algorithm, or even just a specific method of operation. That doesn’t mean that these things are all actually trade secrets, although any of them could be.
To be legally defined as such, a trade secret must be information that isn’t publicly known. Also, a reasonable effort must be made to maintain its secrecy, and some sort of economic benefit must be derived from keeping the knowledge private. These three things are the required elements.
Methods Used by Thieves
From high-tech attacks to lowly dumpster diving, trade secrets can be stolen in many imaginative ways. A thief wanting to gain root access to the computer system of a business might drop a flash-drive in the employee parking lot. If an employee picks it up and plugs it into a work computer (out of curiosity), then a backdoor into the company servers could be opened.
Another technique used is to go through the trash of a targeted business, seeking anything useful. For this reason, passwords should never be written down, all sensitive paperwork should be shredded before disposal, and discarded equipment should be given a forensic data wipe.
A wily competitor might even try a simple tactic such as luring key employees away in an attempt to gain inside information. A strong company policy that includes a non-disclosure agreement will discourage this type of unethical behavior.
Prevention and Protection
The first step is to make an assessment on what exactly must be protected. Next, a comprehensive plan should be created that clearly states how this trade secret will be passed within the company. It obviously wouldn’t be wise to share crucial information with every new employee, but care must also be taken among managers and supervisors. Critical variables of a company’s success should never be openly discussed. Likewise, private conversations regarding the secret should be handled with care. A certain level of paranoia is appropriate when dissemination of sensitive information would negatively impact a business.
If a Theft has Already Occurred
Trade secret theft is a Federal offense and must be taken seriously. Time is a critical factor whenever an instance of economic espionage has been discovered. Immediate action must be taken in order to lessen the possibility of the trade secret being exposed to a competitor or the public. Quarantine the leak, if possible, before conducting a complete investigation. If only a minor infraction has happened, involving a careless employee, then it might be decided that in-house disciplinary action would be an appropriate course. However, attorneys and law enforcement should be notified whenever substantial damages have been suffered. Records will need to be shown that the trade secret was an asset and that a company policy was already in place in an attempt to prevent loss.
Although commercial crime is a growing threat, a business can operate with confidence if an enforced set of applicable rules exists. A procedure that dictates how trade secrets are handled is necessary for protecting a company both before and after an attack.
For help with your trade secret case, call John McDuff today!