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A trade secret can be any commercially important information, but you need robust procedures in place to protect your trade secrets.

Suggested Readings

Founders School || Intellectual Property || Trade Secrets || Impact Guide (PDF).

The Secret Of Trade Secret Success

A report by the Commission on the Theft of American Intellectual Property estimates that annual losses of international intellectual property theft cost the U.S. economy over $300 billion not including job losses associated with such theft or the diminished incentive to innovate. IP Commission Report (PDF), May 2013.

Note that the procedures in place to protect the company’s own trade secrets will come into play if the company undertakes confidentiality obligations regarding trade secrets of another company, for example, under a confidentiality agreement, supply contract or joint development agreement.

The importance of protecting a company’s trade secrets is seen in the case of AMSC, formerly American Superconductor Corporation. While the courts may offer some remedies for the misappropriation of trade secrets, prevention is better than a cure. Consider the federal indictment filed in June 2013 against Sinoval, China’s biggest wind turbine company. As outlined in the indictment, Sinoval conspired with an AMSC employee to steal advanced software from the American firm, its former supplier, causing $800 million in damages and the laying off of hundreds of AMSC employees.

US Patent & Trademark Office on trade secret protection vs. patent protection.

Questions for You

What trade secret assets do you have? What records do you need? What steps to protect?

Does your IP Strategy call for protecting trade secrets of the company? If so, what procedures do you need to implement and institutionalize to protect your trade secrets and to be able to demonstrate that you follow those procedures?

What management procedures do you need to implement to determine the possible impact on your trade secret rights of any planned dealings with others, such as entering into a joint development deal?

What management procedures do you need to implement to ensure that incoming employees do not improperly use or disclose to your company any trade secrets of a former employer? Will you be able to demonstrate that you follow those procedures?

Questions for Your Team

How do you help?

What procedures do I need to follow for the protection of company trade secrets?

Do I understand the risks of using or disclosing to the company any trade secrets from my former employer, and that the company does not want the shoe you a source close any such former employer trade secrets?

Tools and Exercises

Numerous trade secrets protection checklists and discussion materials are available on-line. This PowerPoint presentation from the US Patent and Trademark Office provides discussion and checklists for protecting and enforcing trade secrets and other intellectual property rights. The notes associated with the trade secreted slides are useful.

Checklist for Protecting and Enforcing IP Rights in U.S. and Abroad (PPT).

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