Especially early in the COVID-19 pandemic, it seemed like not a week went by when another article (or several) appeared, including by me, giving advice to companies on how to better protect their trade secrets especially with exponentially increased remote work, among other things. To be sure, there are increased risks to trade secrets resulting from the pandemic. But as savvy in-house counsel know, all companies need a comprehensive trade secrets management program even aside from the pandemic. So what should companies be worried about when it comes to trade secrets? I recently had the opportunity to speak with in-house counsel from the bio-tech, pharmaceutical and materials industries to discuss the top concerns that keep them up at night when it comes to trade secrets, both before and now in light of COVID-19. Here are some of the takeaways that I learned from these discussions.
First and foremost, the in-house counsel I spoke with worry about “insider” risk. Their definition of an “insider” is broad and includes not only employees but also contractors and other business partners, such as vendors and customers. These are the people who often have access to company trade secrets on a day in day out basis. What are the key concerns or risks? Well, naturally in-house counsel are concerned about risk of deliberate or inadvertent loss—ranging from an employee taking trade secrets to a competitor and using them there to an employee losing a laptop containing critical information that was not password protected or encrypted. But of equal concern is trade secrets contamination or infiltration. For example, some are concerned about having files or documents containing company trade secrets destroyed or altered. Others are concerned about having a company’s trade secrets becoming comingled with a third-party’s. The later scenario can happen often in industries with a lot of employee mobility among competitors. Similarly, with business partners, concerns include use of trade secrets beyond the scope of permitted uses or continued use after a business relationship ends. Indeed, you also need to think about the business partners’ employees—how good a job are the business partners doing internally in protecting their own trade secrets, let alone yours?
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