Earlier this week, the U.S. Department of Justice (DOJ) warned that there has been a dramatic rise in trade secret theft. The DOJ points to China as the primary sponsor of such trade secret theft. Speaking with CNBC, U.S. Deputy Assistant Attorney General Adam Hickey stated that supply chain and telecommunication companies are prime targets of foreign governments seeking to improve their own industrial knowledge. China in particular has launched a Made in China 2025 campaign in which it is seeking to become a dominant global high-tech manufacturer, and has, therefore, created an environment that rewards theft of intellectual property.
While the Chinese threat garners news headlines, employers face a less existential, but nonetheless critical, threat to their trade secrets and other intellectual property: their own employees. And the concern is not just employees who wish to steal their employer's trade secrets for their own purposes, such as creating a competing business venture. Employees can jeopardize their employer's trade secrets merely by being lackadaisical in protecting such secrets.
Courts place the burden on employers to use reasonable measures to protect their trade secrets. There is no bright-line rule on whether a particular measure is reasonable. Generally speaking, however, employers should use a heightened standard of protection for their trade secrets, rather than the normal business practices companies use to protect data that is merely confidential.
The following are eight tips employers can use to better protect their trade secrets:
Update nondisclosure agreements - make sure your agreements sufficiently identify the trade secrets that employees are required to maintain.
Limit access to trade secrets - true trade secrets should be on a need-to-know basis
Monitor access to trade secret repositories - employers must monitor electronic databases and other storage repositories containing trade secrets so that only designated individuals have access to trade secrets.
Cybersecurity - make sure that you...