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Trade Secret Leaks

Updated: Aug 3, 2021

There is a growing awareness of the value of Trade Secrets and the need to protect them.

The first step in preparing a trade secret protection plan is to pinpoint weak links where trade secrets and confidential information could be compromised.

Three types of trade secret leaks:

  • The Intentional Leak–when there is a malicious intent; for example, an external entity that tries to hack your system for information, or an internal resource misappropriates confidential information. These types of leaks can often be addressed by IT & Cyber technologies. Many services provide tools and services to monitor information flow, safeguard the IT systems and prevent access by unauthorized users.

  • The Ignorant Leak –when there is a lack of awareness regarding trade secrets, for example, when confidential information is not marked or managed, or when employees do not know what information qualifies as core assets. All employees need to be clear about what information is allowed to be shared, with whom, and when.

These types of leaks are usually addressed by deploying internally focused measures. By enacting a trade secret protection policy, procedures for managing confidential information, and employee training.

In my experience, the 'Inevitable Leak' is the most complex.

  • The Inevitable Leak occurs during the usual course of doing business, which requires sharing of information, including confidential information and trade secrets. The "inevitable" sharing of information carries a risk of trade secret misappropriation.

Doing business involves building relationships and trust. However, business partners change over time. Business partners have their agendas and they have other, third-party business partners. Doing business includes formal meetings in business settings as well casual and off-the-record conversations.

In this case, there is no template or fixed solutions. Reducing the risk of trade secret misappropriation while doing business requires increased awareness and planning.

Awareness and planning imply managing your core know-how. Identifying trade secrets and confidential information, classifying them for value and degree of confidentiality, maintaining access control measures, and monitoring trade secret metrics regularly.

Bottom line - if you are not thinking about protecting your intellectual property, you are probably giving it away.

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