Strengthening trade secret protection in Canada: Part 3

As I explained in Part 1, IP flight risk reduction comprises three steps:

1. Instituting an “IP aware” mindset within the company via an IP policy.
2. Securing the company’s trade secret ownership.
3. Running periodic mining or discovery sessions.

I previously explained how to implement steps 1 and 2 with regard to trade secrets in Part 1 and Part 2 respectively. In this blog post I will describe how to implement step 3.

As explained previously, good identification of trade secrets results in better tracking and securing of relevant trade secrets, and results in more complete coverage. Periodic IP mining or discovery sessions should be utilized to discover and document trade secrets created within the company. As explained in Part 1, the IP policy should identify the key people to implement the processes described above. It is best to establish a cross-functional team with representation from those who can ensure that trade secret protection policies are being followed. For example, the IP policy should recommend that the following people be included in IP mining/discovery sessions:

• the technical team(s),
• the cybersecurity/security team, and
• the IP team.

There are two possible sources of undiscovered trade secrets in an organization:

1. Trade secrets which have already been implemented but have not been recognized; and
2. New inventions, as all inventions begin as trade secrets before a decision is made to either patent or retain as trade secrets.

For each discovered trade secret, questions which need to be answered include:

• What is the trade secret? As explained in Part 1, a trade secret is defined as:

"any information that (a) is not generally known in the trade or business that uses or may use that information; (b) has economic value from not being generally known; and (c) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”

So, to determine what the trade secret is, the organization needs to determine which information is not generally known and has economic value from not being generally known. In the case of an invention, an invention disclosure form should be filled as well.

• Who created the trade secret?
• When was the trade secret created?
• If the trade secret is/are associated with products, then which products are the trade secret associated with?
• What is the value of the trade secret to the organization?
• Whether the trade secret should remain as a trade secret or a patent should be filed.

Once the trade secret has been identified and the value to the organization has been determined, the following questions with regards to reasonable effort to maintain secrecy can be answered:

1. What level of protection should be set for the trade secret?
2. Who should have access to the trade secret?
3. How should temporary access on an “as-needed basis” be provided internally and externally?

All of the answers to the above questions should be entered along with the above information and tracked within a trade secret database or register. The register/database should also track:

• When access was granted internally or externally,
• Why access was granted internally or externally,
• To whom was access granted,
• How it was granted, for example, was it granted:
• Under a non-disclosure agreement?
• As part of a contracting engagement agreement?
• Within the context of a joint venture?
• As part of an ongoing patent application process?
• How long will access be granted for, and

The steps outlined above and in parts 1 and 2 together provide organizations with a framework to adequately protect trade secrets given the upcoming changes in Canadian trade secret laws.