Trade Secrets

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An Information Resource for Today's IP Attorneys

800.442.5191

July 2006 Edition

This Issue, we introduce to you :

Carlton Tolsdorf, Jr., MAE: "Mr. Tolsdorf has over 30 years of experience in the high technology & telecommunication international/domestic projects, also providing litigation support services to high technology Fortune 500 clients. Mr. Tolsdorf has served in the CIA, creating national intelligence gathering networks, in addition to co-founding International Telecommunications Initiative (ITI). ITI develops wireless networks for private clients worldwide."

Protection of Intellectual Property from Domestic / International Theft

by Carlton Tolsdorf, Jr.

Member Academy of Experts (MAE)

Focus: Today’s competitive market place has transformed the nature of economic threats to the health, welfare and existence of commercial and governmental organizations. The intellectual property of an organization, generally embodied in trade secrets, patents, trademarks and copyrights has great economic value. According to the National Counter Intelligence Center, in the year 2000, loss’s attributed to the theft of intellectual property was in excess of 100 Billion dollars to US interests alone. ^1.

Trade Secrets as an example: Trade secrets are one prized treasure of those who wish to advance their business interests with out the investment of millions or billions of dollars in Research and development. Information that an organization creates in the process of developing technologies or services and delivering these to the world wide market place include:

Design process
Strategic plans
Business plans
Marketing / sales plans
Customer lists /data bases
Partnerships
Key employee lists and databases
Organic or pharmaceutical technologies
Complex technologies (integrated circuits, software programs, industrial process’s for example)
Business methods (cost and pricing data; unpublished promotional materials
Marketing techniques and supporting data
Methods of instruction
Business knowledge (lead times for R&D to product offering; knowledge of alternative suppliers )
Demographics of customer’s key decision makers

In a nutshell, all information that gives a competitor an advantage or a head start is a viable, valuable and protect able secret. The commercial advantage that creates this value keeping the information secret and closely held within the organization.

Factors to consider in defining a trade secret: The legal history of Trade Secrets in the courts over years of case history is simply that the courts have great difficulty in formulating a precise definition or formula for what constitutes a valuable trade secret. Some rough guidelines that can be used:

Is the information known outside of the creating organization
How wide spread is the information known by employees within an organization
To what extent has the organization developed an integrated and comprehensive program, practices and procedures needed to protect the information
A valuation of the information to the business that created it. How valuable is it?
What investment has the organization in the Research & development, production and support of the products, services or information
The ease or difficulty with which the information could be properly acquired or duplicated or reverse engineered independently.

Elements of a sound Trade Secret Protection Program: Executives of all organizations encounter trade secrets every day that are vita to delivery of profitable products and services in this highly interconnected (internet based) economy. These secrets are rarely understood or identified by organizations prior to the act o stealing occurs. Theft generally involves trusted employees who attempt to develop the secrets on their own; or key employees are hired away by a competitor; or suddenly a foreign corporation is offering your next generation product in your back yard. To avoid the serious economic impacts of trade secret theft, organizations need to be knowledge of the value of the information and take proactive steps to protect the fruits of their creative talents and unique abilities.

A typical protection program should include:

Have a team of professional experts develop an assessment of the trade secret inventories and valuations for assets.
Develop and institute a physical and electronic protection operation for the organization, integrated across all aspects of the business and relationships with outside entities.
Implement positive visitor controls
Label and control all trade secret related documents with a RUNNING LIST OF ALL EMPLOYEES WHO HAVE BEEN GRANTED ACCESS AND OR USED THE INFORMATION.
Review the history of any potential clients / employees and suppliers in terms of their track record in handling and protecting secret information.
Institute a policy for the handling and implementation of unsolicited information.
Develop a database of legal forms for implementing documentation trail of all trade secrets.

^1. 2000 Annual Report to Congress of the National Counterintelligence Center

To Learn more on how you can protect your client from Trade Secret Theft,

call IPExperts. com today at 800-442-5191

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