Here’s how companies can leverage the White House plan to take the offensive on trade secret theft.
Attorney General Eric Holder, center, and acting Commerce Secretary Rebecca Blank were on hand Feb. 20 when the Obama administrations rolled out an initiative to fight the growing theft of private-sector trade secrets.
The White House rolled out a new strategy on Feb. 20 to combat economic espionage and theft of U.S. trade secrets.
The plan acknowledges that theft of U.S. private-sector trade secrets is accelerating and “threatens American businesses, undermines national security, and places the security of the U.S. economy in jeopardy.”
The strategy focuses on China and other countries, and outlines plans to ramp up diplomatic pressure, assess whether new laws are necessary and prosecute more federal criminal cases.
Often called “confidential information” or “know-how,” trade secrets can be almost any type of information that is valuable to a company because it provides a competitive advantage. “Technical” trade secrets or know-how can include formulas, programs, machines or techniques. “Nontechnical” trade secrets can include things such as financial information or customer lists.
Although the plan and its attachments span more than 100 pages and detail a multifaceted approach to combating international economic espionage, companies need not master the entire document to benefit from it. Instead, if companies focus on three specific take-aways, they can leverage the plan immediately.
To protect your know-how, know how to work with the feds. The White House plan was the product of work by a number of federal departments and agencies. These included the Departments of Commerce, Defense, Homeland Security, Justice, State and Treasury, the Office of the Director of National Intelligence, and the U.S. Trade Representative Office. Under the plan, each of these agencies will be more intensively focused on combating economic espionage and enforcing the rights of trade secret owners. That’s the good news. Here’s the challenging news: To take full advantage of the heightened commitment of federal resources, you may have to work with federal agencies.
To do this most effectively, companies need to know how to navigate the labyrinth that can be the federal system. At a minimum, this means having a relationship with lawyers who frequently appear in federal court and understand the roles of the various federal agencies that help build cases before they get to court. It can also mean knowing other knowledgeable professionals, such as computer forensic experts. Among other things, they can help identify the source of threats to trade secrets and coordinate with federal agencies to address them.
The feds can’t help you if you don’t first help yourself: Protect your trade secrets now. A fundamental principle of trade secrets law is that the relevant information must be kept secret. That may sound like a BFO (blinding flash of the obvious), but it is a principle that even some sophisticated companies overlook. Companies wanting to protect their information as trade secrets must make reasonable efforts to protect the confidentiality of the relevant information. The law does not require perfection, only “reasonable” efforts. Typically, this means doing what makes sense in a particular situation.
Smart companies adopt a trade secret protection plan tailored to their circumstances. And there are certain security steps that all companies should at least consider. These include assessing physical security, shoring up agreements and training with employee and business partners, and double-checking cyber security.
Herd the cats: Identify and prioritize your key trade secrets now. Of course, before a company can take reasonable steps to protect the confidentiality of information, it must first know what it’s trying to protect. Simple concept? Yes. Easily applied? Not necessarily. To protect certain information you often must sacrifice other information. Put another way, if you try to protect everything, you may end up protecting nothing. This is a process of prioritization that every good executive or manager will recognize.
Bringing this discipline to bear regarding your intellectual property is a skill that often requires input from a variety of areas within the company. There are as many ways to approach this process as there are companies. The key is to invest the time now to identify the information that is really critical to your business and that gives you a competitive advantage. Then build a trade-secret protection program designed to protect that information.
Trade secret issues are often time-sensitive and require quick, decisive action. Smart companies develop a battle plan before they are under siege. Taking the steps outlined above can position your company to leverage substantial federal resources and protect your trade secrets before they are attacked.