For years, protecting trade secrets has been one of the lesser-known aspects of intellectual property law and never received as much attention as trademark, patent and copyright protection. However, in an increasingly fast-paced digital world, protecting trade secrets has become vital. In fact, the current U.S. administration has cracked down on Chinese companies stealing U.S. trade secrets, even banning U.S. companies from making deals with Chinese tech giant Huawei claiming the company is a threat to national security.
So, why are trade secrets more important when it comes to tech-related businesses?
Investment in R&D
First, to create a longer-lasting cellphone battery, a better operating system or a powerful, new data-mining algorithm takes time and money. Companies invest in research and development (R&D) for not only the hardware and software needed for technology upgrades, but the processes to test them, work out any bugs and then produce them and market them to potential customers.
As part of that process, trade secrets are developed. Technically, a trade secret is a secret device or process used to manufacture a product.
This past January, Huawei ended up facing charges from literally stealing a robot arm T-Mobile designed to find smartphone flaws. The robot arm was a T-Mobile trade secret.
Rapid product cycles
The tech industry is also known for its rapid product cycles, introducing new products and features in cellphones, computers or tablets and processing chips within months of other significant upgrades. With such rapid development, protecting trade secrets becomes harder as companies are forced to continually evaluate what secrets they need to protect and how to best do that.
High-tech employees increasingly are mobile, moving from company to company, industry to industry as new technologies emerge and others fade in the marketplace. More and more, tech workers are contract employees, brought in to a company for a specific project or product launch. Trade secrets often are leaked through employees who leave one company for another.
Trade secret protection
For companies that want to protect trade secrets, here are a few essential tips:
- Have employees sign nondisclosure agreements about specific trade secrets and implement company policies for handling trade secrets.
- Limit exposure to vital company trade secrets, only allowing minimal access among employees.
- Label documents as being confidential if they included protected information.
- Make sure cybersecurity systems are in place to protect digital trade secrets.
- Exercise caution when working with international companies to keep trade secrets undisclosed.
No one wants to see another company benefit off their latest tech innovation. If you feel your company trade secrets have been illegally leaked, consult an experienced intellectual property attorney about what legal recourse you can take.