Copyright © 2017 ALM Media Properties, LLC. All Rights Reserved.
A company’s ability to maintain the confidentiality of its trade secrets and other sensitive information is affected to a significant degree by employee mobility. An exiting employee can leave with a company’s confidential information, risking loss of trade secrets and serious harm to the company. Additionally, incoming employees can threaten a company’s confidential information by contaminating it with proprietary information from a prior employer. This article describes several practical steps and specific procedures that companies can follow with respect to departing and incoming employees to help protect company confidential information, and to mitigate the risk of exposure to third-party confidential information. Companies regularly have to decide whether to seek patent protection for their innovations or to maintain them as trade secrets. Many companies will file patents for certain inventions and elect to treat other techniques, formulae, or processes as trade secrets. For example, companies may more frequently seek to patent customer-facing innovations, while maintaining back-end solutions as trade secrets. Each route has its advantages and limitations. Regardless, all companies will continue to have confidential information that they will want to preserve. Some of the confidential information may constitute protectable trade secrets, while other information may simply be sensitive information the company does not wish to share with the public—and certainly not with its competitors. In either event, the value of the information (and any legal protection) is largely dependent upon the company’s ability to maintain its confidentiality. It is nonetheless a practical reality that companies generate, maintain, and lose confidential information through their employees. While with the company, many employees will have access to, and work regularly with, the company’s confidential information, using myriad company-issued computers, devices, and storage media to handle the information. When such employees depart, there is a risk that, through inadvertence or otherwise, they will take confidential information with them. To address this risk, companies should have procedures in place to ensure confidentiality is maintained. These procedures may include having new hires execute invention disclosure, assignment, and confidentiality agreements. These elements are particularly important for departing employees, through whom companies frequently have the greatest exposure to lost confidential information.