Impact of technology on trade-secret security

On Behalf of | Jul 19, 2018 | Trade Secrets |

In recent posts, we have been discussing the nature of trade secrets, the importance of nondisclosure policies and agreements with employees and business partners, and the remedies provided under California law for trade-secret misappropriation. One of the reasons these issues have quickly risen to the forefront of intellectual-property protection is the explosion of technological advances. 

First, the American Bar Association or ABA reported that from 1978 to 2016, intangible assets as a proportion of total assets of companies rose from about 20 percent to almost 90 percent. By nature, an intangible asset is easier to steal, of course, because intangible assets have no physical presence. Intangible assets that can also be trade secrets could include customer lists, formulas, manufacturing processes, source code, designs and so on.

Second, it has never been easier for employees or business partners to illegally make off with trade secrets because of personal technology that can aid in such theft. For example, employees and contractors can use mobile phones to photograph valuable data and information and which can be easily loaded onto tablets, thumb drives, or similar technology. Even a technology novice can send trade-secret information over the Internet. 

Cyber security 

The ABA cited a 2014 Trustwave Global Security Report for the statistic that 71 percent of data breaches are never detected. So how can you protect your trade secrets in this sophisticated technological environment? Enlist the advice and services of a respected and proven data security company to make your technology as secure as you can. 

Cyber security is not a one-time investment. Business owners need to engage in regular consultation with experts to keep business systems as secure as possible in light of continually developing vulnerabilities. 

Pair data security with solid policies and procedures that require trade-secret confidentiality of employees and business partners, especially at onboarding and end of professional relationship, including binding nondisclosure agreements. Regularly have legal counsel review policies, procedures, and nondisclosure agreements to keep them timely and to incorporate protections in response to new kinds of trade secrets as the business evolves.