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|Here are some Tips that can help protect your
company's trade secrets.
The Crown Jewels
Intellectual property (IP) is ex-tremely important to the U.S. economy. As of 2003, IP accounted for approximately 33 percent of the value of U.S. corporations, or more than $5 trillion, according to Stephen Siwek, principal at Econo- mists Incorporated, a consulting firm based in Washington, D.C. Yet many companies are ill prepared to adequately protect their IP in the face of increased attempts to steal it.
At least part of the problem is due to economic pressure on U.S. firms to control costs, says Abe Michael Smith, CSO at Xilinx, a digital programmable logic device maker based in San Jose, Calif. As more enterprises outsource part or even all of their research and development and product development activities to overseas partners, there is far greater risk that important information can slip through the cracks. And establishing overseas divisions that play a significant role in developing IP can be risky when strong IP laws do not exist within those countries. "Balancing the need for improving profit margins with the kind of security required to adequately protect IP can be very difficult," says Smith.
Moreover, the unique characteristics of trade secrets make companies particularly vulnerable to their loss.
"Once a trade secret is out of the bag you can't get it back in," says Sabett. "If you are talking about something like source code, that represents the crown jewels of the company. And when its status as a trade secret is gone, it's gone."
Worse, it can take years until a trade secret theft is detected, says Smith: "You wouldn't even know it [your IP] was missing for five years, when a competitor would suddenly introduce a product that sold for one-third to one-fifth of the price of yours."
And it is important to note that trade secrets are vulnerable not just to malicious theft but also to accidental leakage in the normal course of business. For example, an engineer who has not been properly trained in what constitutes trade secrets might make a seemingly innocuous conference presentation that includes them.
This was first published in May 2007