I had a telephone conversation with a European client recently regarding what it should do to protect its trade secrets in the various countries in which it manufactures its products and/or does business. This client has been doing business internationally for nearly a decade, but is for the first time being forced to bring “its best IP” to “risky countries” for competitive reasons.
Strangely enough, this was the first time a client has asked me this question, at least in this form. Our international IP lawyers are often asked to draft contracts that contain trade secret provisions and we constantly draft International NNN Agreements designed to protect trade secrets. But this question went beyond that. The question was directed at all of the methods, both legal and non-legal, this client should employ to protect its trade secrets.
I thought for a while and eventually spewed forth the following five keys to international trade secret protection (or something fairly close):
1. First, figure out exactly what you want to protect.
2. Second, figure out how your trade secrets can be taken and what you can do to protect against them being taken. This involves answering a number of questions. Does it make sense to have your suppliers/vendors sign a code of conduct or a contract making clear they recognize and will protect your trade secrets? What operational structures can you put in place (anywhere along the chain) to protect your trade secrets? Can you register any of these as patents or copyrights and, if so, does it make sense to do so?
3. Then make sure your contracts (plural) provide trade secret protection. In particular, look at your employment and sub-contracting agreements. Make sure these contracts safeguard your trade secrets both during the business relationship and after the relationship terminates — you would be surprised how many contracts seem to end with the termination of the business relationship. Make sure there are no weak links where your trade secret can squirt out and you have no contractual protections. Make sure anyone who is going to learn about your trade secrets has signed an NDA or an NNN Agreement (whichever makes the most sense depending on the country and the situation) before they get access to them.
4. You also should make sure all your people understand the importance of protecting your trade secrets. I don’t have any hard numbers on this, but if I had to guess, I would say that well over half of all trade secret thefts come from your own people and well over half of those come from sloppiness. It is your job to make sure you are employing the right personnel and using the right physical and technical security measures to prevent trade secret leakage. Do the same thing with your suppliers and your vendors and anyone else with access to your trade secrets. Make sure you do whatever you can to ensure your trade secrets remain a secret even after your business relationships end. Go ahead and remind your former business partners and employees of the requirement to maintain your trade secrets.
This is really important also because if you are not respecting your trade secrets, most courts will no longer consider them to be trade secrets. Our NNN Agreements are written to protect more than just trade secrets, but it is still better for you not to have to deal with the issue before a court as to whether something is a trade secret or not
5. Lastly, don’t be afraid to sue to protect your trade secrets. Among other things, this tells people you are serious about them.
Did I miss anything?