A storm is brewing in the intellectual property world, and it’s heading straight for trade secrets.
With millions of Americans quitting their jobs each month — 4.3 million in December alone — and pandemic-stunned companies still leaning on patched-together remote operations, controlling sacred information has become particularly difficult.
The Great Recession of a decade ago saw a marked upturn (a staggering 800 percent, according to a Bloomberg Law analysis) in state and federal trade secret litigation. The “Great Resignation” of today appears headed down a similar path, and companies would be wise to examine their risks now.
Make sure you’ve considered these six key areas as a starting point:
Cross all your t’s in employment agreements.
If you’re still using the standard employment contracts of five years ago, make some careful updates in light of how your business runs today.
Standard nondisclosure agreements are helpful, but perhaps your business would benefit from explicitly stating trade secret policies and other rules as relates to remote work. Perhaps you’d like to clarify expectations about the use of screenshots or photos taken of company materials.
Another snag we’ve witnessed: Full-time employees working full-time for a competitor, too. Some people have found that the extra time and freedom of working from home expand their capacity for cashing in. However, this can create serious risks. Processes you use could be implemented for your competitor. Zoom calls could accidentally reveal background computer screens filled with your confidential data. Specify your expectations as to whether an employee is allowed to work simultaneously for a competitor — and consider implementing tools that can help you understand how your employees spend their time.
Consider whether a trade secret truly offers the best protection for your information.
Legacy companies such as Coca-Cola, Heinz Ketchup and KFC have been able to fiercely guard their formulas, but it’s not easy. Although trade secrets provide the benefit of confidentiality — as opposed to patents, which are protected by public disclosure — they are a very imprecise way to protect your information, especially in a remote world.
It’s worth discussing your options with an IP attorney. There are ways to build in layers of protection and complexity. Beyond trade secret protection, there are various types of patents for different aspects of your products, as well as copyrights for graphics and media. A skilled attorney can help you craft valuable protections and circumvent potential threats.
Examine your remote work environments.
With 45 percent of full-time U.S. workers always or sometimes working remotely, it would be impossible to physically examine these environments. But common sense, communication, and updated technology can go a long way.
Apart from HR concerns, companies have been battling surging cybersecurity threats, so a robust security framework can help on a variety of fronts, as can a cybersecurity policy specific to remote work. Be clear about expectations, such as crossover among company-owned and personal devices and email accounts, acceptable programs/apps, and regular backups or password changes.
Be vigilant for any sudden activity surrounding confidential information — lots of emails or downloads, for example.
Don’t get lazy when an employee leaves.
Be sure to audit company equipment, such as laptops, that are returned when an employee leaves. Check what is and is not on the device, as well as whether there were any big downloads of information. This basic step can provide an early alert as to risks.
Clearly label your information.
Leave no room for misunderstandings or excuses. If something is confidential or trade secret, clearly label it as such.
Train your employees on a regular basis.
Regular training of employees who handle sensitive information not only keeps confidentiality expectations top of mind — it helps you keep track of developments. This vigilance can yield big dividends in terms of heading off potential threats or lawsuits.
Megan Redmond is a founding member of Erise IP and a first-chair intellectual property litigator. She can be reached at megan.redmond@eriseIP.com.
