Trade secret theft has been in the news recently. Earlier this year, an executive secretary at Coca-Cola was found guilty of attempting to sell Coca-Cola's secrets to its competitor Pepsi. Two others allegedly involved in the attempt pled guilty. Other recent cases demonstrate that trade secret theft occurs in all types of industries and businesses and affects not just the big companies or even high-tech companies, but rather lots of business who face a tough, competitive marketplace.
Nearly every business has valuable secret information that a competitor might want to gain an edge and with employees moving from company to company with increasing frequency and the ease of transmitting large volumes of information across the internet with the click of a mouse, nearly every business needs to take steps to protect its confidential information. The first step to protecting a trade secret is to recognize and treat it as a trade secret.
What is a trade secret? Trade secrets can be any type of information, including financial, technical, scientific, economic, business or engineering. To qualify as a trade secret the information must have independent economic value from not being generally known or readily ascertainable by proper means, In other words, the information must have economic value because it is secret.
What information does your company have that would be of economic value to an outsider? Use this checklist to help you identify your business's valuable information:
- formulas and recipes
- competitive bids
- engineering plans or drawings, diagrams, blueprints
- research experiments and plans
- proposed products or projects
- scripts, story line, plots
- testing methods
- prototypes and models
- methodologies and production techniques
- sales and market forecasts and strategies
- customer information
- source code
- designs, including drawings and specifications
- pricing information
- cost and profit information
- inventions not yet published or patented
To be a trade secret, the information must be secret. To maintain the information as a trade secret, the company must make reasonable efforts to keep it a secret. How is your company's confidential information maintained? Today, computer files and other electronic media hold tremendous amounts of information. Are your computer secrets stored electronically in, for example, e-mails, presentation slides, spreadsheets, digital photographs, training programs, CDs, DVDs, other storage devices, laptops and networks? Documents, those drafted on a computer and those written by hand, contain valuable information. How are notes, document drafts, meeting agendas, drafts, meeting agendas and minutes, proposals, mark-ups, presentations, notebooks and sketch books kept? Some of the most valuable trade secrets are tangible items, such as prototypes, samples, manuals, blueprints, patterns and models. Who has possession of those items? How are they transferred from person to person. Are they merely lying on individuals' desk accessible to anyone? Desks often have confidential documents and information on the desk top and in desk drawers (locked or unlocked). In addition to individual desks, confidential information may be found in file cabinets, vaults, conference rooms, work rooms, storage areas and briefcases.
Knowing where and how your company's confidential information is being kept, is a key step toward recognizing how vulnerable your secrets are to theft and taking steps to secure them for inadvertent and intentional disclosure.