Studies show that trade secrets are often among the most valuable intellectual property. Yet they are frequently under-protected. Special care must be taken to protect trade secrets. They are only protected through confidentiality — confidentiality that is all too frequently lost through inadvertence. Indeed, the most fundamental question to be asked in any enforcement case or for valuation purposes is “what is the trade secret.” Yet most clients struggle to answer this question with sufficient specificity, and many clients have fundamental misunderstandings about what can and cannot be considered a trade secret. Not having this answered properly ahead of time increases the likelihood of inadvertent loss, as well as the cost in an enforcement litigation.
When it comes to trade secret protection, the law demands a business take “reasonable measures” to protect them. A multi-prong approach is required. Constant, yet unobtrusive, vigilance is necessary to ensure that “reasonable measures” are taken to protect the confidentiality of the trade secrets. Confidentiality agreements and cybersecurity protections are essential, but they are one part of what is required for the effective protection of trade secrets. Threat assessment and management is advisable. Special attention must be paid when trade secrets are shared outside the company, with business partners and others in a supply chain. In the event of enforcement, clients will need to be able to answer what was shared with others and when it was shared, an exercise that, for most clients, will require a lengthy and expensive investigation, as this information is rarely tracked in a systematized and comprehensive way and few tools are readily available to help clients in this effort.
Our litigation experience in helping companies enforce their trade secrets, as well as our work on several national “best practices” efforts related to trade secret protection, gives our firm the knowledge necessary to assess the effectiveness of a company’s trade secret protection measures and the knowledge and tools required to assist companies in improving and enhancing these measures, especially around trade secret identification and categorization and developing and implementing the systems and processes necessary to track and document trade secret sharing. Improvements in these areas will both reduce the risk of loss, as well as the cost of investigation and enforcement should loss occur.