What are your greatest trade secrets threats?

For many people, the term “trade secret theft” brings images of hackers and foreign espionage agents to mind. However, a recent report published by Stout Experts and made available here highlights three less glamorous but equally important trade secrets threats in the United States (US):

1) Cases involving former employees - Increasing employee mobility due to the Great Recession has led to an increased number of these types of trade secret cases:

    “Additionally, certain types of trade secret cases appear to have increased due in part to the notable employee turnover that occurred as a result of the Great Recession. Coupled with an increasingly service-based economy, strategic recruiting by competitors, and the ease of which information can be obtained and copied in an electronic environment – many cases pertaining to the theft of trade secrets emanate from the employee workplace.” [See, “Employee Mobility” on p. 9 of the Stout Report]

2)      Cases involving consultants or contractors: 

“[A] broader trend affecting multiple industries is the continued increase in matters related to the hiring of outside consultants. These are instances wherein a consultant advises a company on a specific proprietary project, then uses the information and trade secrets garnered from that project to consult with a completely unrelated company, often a direct competitor.” [See “Use of Outside Consultants” on p. 31 of the Stout Report]

3) Cases involving franchisors and franchisees - Two possible situations may arise:

a.       The franchisee leaves the franchised system and then sets up a competitor business to the franchisor.

b.       Alternatively, the franchisor terminates the franchisee, and the franchisee steals trade secrets. According to the Stout Report:

“Likewise, trade secret litigation has also increased in certain industries such as franchisor/franchisee disputes.” [See “Conclusions” p. 48 of the Stout Report]

“Recently a number of franchisors have aggressively pursued former franchisees relative to these issues, to protect their legitimate business interests. Frequently this has occurred in instances where the franchisee has opened or is pursuing opening a competing platform.” [See, “Trends in Trade Secret Claims” p. 28 of the Stout Report]

To address these problems, the following steps are suggested:

1. Create a database/register of trade secrets. This should also include a list of people who have access to the trade secrets. Furthermore, there should be steps in the IP policy explaining the steps necessary to share trade secrets with external parties such as franchisees, contractors and consultants. Existence of the trade secret will need to be proven in case of litigation. A service such as the International Knowledge Registry (IKR) provided by the International IP Commercialization Council (IIPCC) is useful for this purpose.
2. Clearly inform employees in their employment contracts and during onboarding sessions of the importance of trade secrets and their obligations to keep trade secrets confidential. Similarly, inform them of the approval and impending enforcement of the new Section 391 of the Canada Criminal Code, or the Defend Trade Secrets Act.
3. Clearly set out the obligations of franchisees, consultants and contractors in franchising and engagement agreements. To the extent possible, identify any trade secrets which will be shared with the franchisees, contractors and consultants.

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.

Strengthening trade secret protection in Canada: Part 2

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.

In this blog post I will describe how to implement step 2.

A necessary first step to protect trade secrets is adopting non-disclosure agreements (NDAs). An NDA prohibits an external party which receives trade secrets from disclosing the trade secrets. The NDA should place the onus on the receiving external party to ensure adequate protection of the trade secrets. As explained previously, performing due diligence ahead of releasing the trade secrets to ensure that the receiving party will adequately protect the trade secrets should be standard. Also, it should be standard to indicate in the trade secrets database or registry which trade secrets have been disclosed to the receiving party, when trade secrets are disclosed.

Employment agreements should have relevant clauses to ensure that trade secrets will be adequately protected. Employment agreements should have relevant confidentiality or non-disclosure clauses as explained previously. Since all inventions begin their lives as trade secrets, employment agreements should also have clauses requiring the employee to identify inventions that the employee created in the course of his/her employment. This includes clauses requiring the employee to:

• Promptly disclose all inventions that the employee has created during the course of his or her employment; and
• Participate in IP discovery or mining sessions where the employee discloses inventions created. This could include clauses requiring the employee to fill invention disclosure forms.

The employment agreement should also include express language clauses stating that the employee assigns to the company all applicable future rights to all IP, including trade secrets, created in the course of employment.

It is likely that the company will engage with a consultant/contractor to obtain services. The consultant/contractor may need to know trade secrets to provide these services. Prior to releasing the trade secret(s) to any consultant/contractor, performing due diligence to ensure that the consultant/contractor will adequately protect the trade secret(s) should be standard. As explained previously, similar to all other IP, services or engagement agreement between the organization and a consultant/contractor should specify that:

• the company retains ownership and control of all trade secrets developed during the engagement;
• the consultant/contractor agrees to maintain the confidentiality of any trade secrets which it is given access to;
• the consultant/contractor is responsible for ensuring that each of the consultant/contractor’s employees and any sub-contractors engaged on the project agree in writing to assign all rights to any trade secrets developed in the project; and
• the consultant/contractor is responsible for ensuring that each of the consultant/contractor’s employees and any sub-contractors engaged on the project agree in writing to maintain confidentiality of any trade secrets it is given access to or which are developed in the project.

Finally, it is important to be able to prove existence and ownership of the trade secret(s) in the case of litigation. One such way is by using an external third party registry called the Intellectual Knowledge Registry (IKR), which is administered by the International IP Commercialization Council. The IKR provides incontestable proof of existence (PoE) of electronic documents using a unique digital fingerprint created as part of the IKR. The fingerprint cannot be used to regenerate the actual document, which remains in the safekeeping of the company. The fingerprint is stored in a secure digital vault. Even if the vault is hacked, hackers cannot regenerate the actual documents. Already IIPCC has partnered with WIPO GREEN to offer this service. 

Strengthening trade secret protection in Canada: Part 1

On Mar 13, 2020 Bill C-4 on CUSMA (Canada-US-Mexico trade Agreement) received Royal Assent. The Criminal Code will now include new section 391 on trade secrets:

https://www.parl.ca/legisinfo/BillDetails.aspx?Language=E&billId=10615191

Under this new section, 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.”

Two types of offences are outlined in section 391:

“(1) Everyone commits an offence who, by deceit, falsehood or other fraudulent means, knowingly obtains a trade secret or communicates or makes available a trade secret.

…

(2) Everyone commits an offence who knowingly obtains a trade secret or communicates or makes available a trade secret knowing that it was obtained by the commission of an offence under subsection (1).”

Under the new proposed section 391. anyone who commits an offence referred to in subsection (1) or (2) above is guilty of a criminal offence punishable by jail time up to 14 years.

This new development strengthens trade secret protection in Canada. With this in mind, companies should seek to improve their processes and practices to take advantage of this strengthened protection. 

Previously, I wrote blog posts on reducing IP flight risk, and trade secrets and cybersecurity. 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.

In this blog post I will describe how to implement step 1. With regard to trade secrets, a company’s IP policy should firstly prompt the employee to proactively consider whether a valuable trade secret is being created.

The policy should then explain the processes necessary to identify and secure the trade secret. Good identification results in better tracking and securing of relevant trade secrets, and results in more complete coverage. The following questions should be part of the identification process:

a.       High-level description of the trade secret?

b.       Who created the trade secret?

c.       When was the trade secret?

d.       Which products is the trade secret associated with?

e.       What is the value of the trade secret to the organization?

Once the trade secret has been identified, it should also be entered within a database or register along with the above information for tracking purposes.

After identification, the trade secret needs to be secured. Firstly, the policy must describe how to prioritize trade secrets based on the value of the trade secret to the organization. Important trade secrets will require a higher level of protection.

Part of this process includes determining the level of access to the trade secret of parties internal and external to the organization. Internal access is regulated based on the value of the trade secret. For example, only certain people should have permanent access to the trade secret. Some may be given temporary access to the trade secret as needed.

With regard to external access, the first step is to determine whether access should even be granted to the trade secret. If it is granted, the IP policy should outline how external access should be granted, and how the granting of external access should be tracked. This includes:

-   Non-disclosure agreements and clauses which must be included in engagement agreements,

-   Due diligence to ensure that the external party will adequately protect the trade secret, and

-   Ongoing reviews of processes in place for keeping the trade secret confidential.

Finally, the IP policy should identify the key people for implementation of 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.

IP strategy during COVID-19: Deferral of expenses

The ongoing COVID-19 crisis has exacted a terrible toll on the world as a whole and on Canada. Many have suffered during this time. Many have lost their loved ones. Others are fighting for their lives, or have loved ones fighting for their lives. Medical personnel and essential services workers worldwide are bravely going forward every day to help society cope with and fight this disease.

Along with the personal toll, many others have been affected financially. Across the world people have lost jobs, lost income and lost their livelihoods as a result. This has led to financial uncertainty across the planet. It may be months or years before we return to some semblance of normality.

This difficult and deeply trying environment has impacted startups and small and medium enterprises (SMEs) as well. Revenue and funding have dried up for many startups and SMEs, leading to staff layoffs. Many are struggling and trying to work out what to do in these difficult times.

With all this going on, many are asking themselves the following question: What should we do with regard to our intellectual property (IP)? In this series of posts, I’m going to detail some useful strategies for startups

As I have said previously, IP strategy is tied to corporate strategy. A first step for the C-level executives in a startup or SME is for you to figure out what your corporate strategy is. Once you have figured out your corporate strategy, you can devise an IP strategy to fit with your corporate strategy. For example, are you looking to cut costs? Are you looking to grow your business during these times?

A good second step is to prioritize your IP portfolio, that is, assign a priority to IP assets based on which ones are vital to preserving or growing your core business. This involves determining the relevance and importance of the IP asset to your core business.

Once you have completed prioritization, then you can identify the necessary actions to take with respect to the IP portfolio. You may also need to identify constraints to taking these actions.

A major constraint during these times for many startups and SMEs is cash flow. If cash flow is an issue, you may want to consider the following steps:

•         Deferring cash outflows to the future;
•          Looking for discounts or reductions in costs of protecting IP assets;
•          Selling or licensing out lower priority IP assets to improve your cash position; and
•          Abandoning IP assets to reduce cash outflows.

In this blog post, I’m going to talk about deferral. There are various ways to defer IP-based cash outflows to the future. For example, instead of filing a full patent application, you can file a US provisional patent application. The filing fees are lower, and it gives you 12 months to decide whether to go ahead with filing and incurring the costs of a full patent application. It also allows you to add more material in a low-cost manner when you decide to go ahead with the full application.

Similarly, if you are interested in filing in several countries and these countries are Patent Cooperation Treaty (PCT) signatories, then you can file a PCT application first. This can give you at least 18 months of breathing space in most jurisdictions of importance. It also enables you to add more countries before the PCT application expires if you want to.

Certain countries also allow applicants to defer examination as necessary. For example, Canada allows a patent applicant to defer examination of a filed patent application for up to 4 years from the date of filing the Canadian application. This helps push the costs of responding to the Canadian IP Office (CIPO) well into the future. Similarly, Japan, China and South Korea also allow applicants to defer examination of their filed applications.

Some countries also allow you to extend the deadline to respond to an office action, and may charge an extension fee to do so. This is advantageous if, for example, you feel that there may be a delay in receiving cash flows.

Put Yourself in Someone Else’s Shoes: Using Patents to Improve Attractiveness and Value for Acquisition

Many C-level executives in startups and small medium enterprises (SMEs) often say: "Why bother with patents? They cost so much to get and they're so expensive to enforce. I've got no hope of enforcing my portfolio if a large company with deep pockets infringe."

In business it's often a good idea to put yourself in another party's shoes, for example, your customer or supplier. So, when I hear C-level executives say the above about patents, my advice is to put themselves in another party's shoes: That of a potential acquirer.

Their objections are partially correct. Patent filings can be expensive. While there are ways to potentially reduce costs, it can be expensive to enforce patents. However, for a potential acquirer, a good patent portfolio increases their company's attractiveness and value as an acquisition target or as a partner. Also, the value of the portfolio is likely to be many multiples of the cost to obtain and manage the portfolio.

An example of this occurred in December 2019, when Adaptiv Networks acquired LiveQoS. Adaptiv Networks CEO Bernard Breton stated that:

"The expertise we are getting from the LiveQoS engineers, along with the patents and technology places us as a technological leader in the SD-WAN space with 20 relevant SD-WAN patents”

Adaptiv also stated the following in a press release:

"The addition of a highly skilled and experienced team will enable Adaptiv Networks to improve its offering, accelerate its plans to better serve its valued customers, and pursue its plans for growth. In addition, the combined patent portfolio will form one of the most comprehensive in the SD-WAN space."

Here's another example: In May 2017, Cisco acquired AI startup Mindmeld. Cisco stated that part of the reason was the MindMeld patent portfolio: 

"With ten patent assets* to its name, MindMeld brings industry-coveted AI, software and engineering talent and expertise to further the evolution of Cisco's collaboration suite."

I also suggest that C-level executives put themselves in the shoes of a potential investor. Increased attractiveness and value as an acquisition target would likely make their startup/SME more attractive to investors. Doesn't that make fundraising easier?

But what about large companies infringing? Well, what if another large company with deep pockets finds the startup/SME’s technology and patent portfolio attractive? The other large company has the resources to enforce the patent portfolio. Additionally, knowing that one large company uses the patented technology will likely increase the attractiveness and value of the portfolio to the other large company. This is especially true in a patent-litigious field such as mobile technologies. Doesn't that make the startup or SME a target for acquisition by the other large company? 

So, if you're not sure whether or not to file for patent, the best course of action may be to put yourself in another person's shoes, in particular that of an acquirer or an investor. Putting yourself in another party’s shoes is great business practice, and practicing it with regard to patents could benefit you greatly!

Intellectual property (IP) issues for hiring employees

Hiring employees is important for scaling and growth. However there are IP issues related to hiring employees. Margot Davis, Junior Partner at Innovate LLP, and I co-authored a blog post on IP issues for hiring employees. This blog post is available at:

https://innovatellp.com/2019/12/02/intellectual-property-ip-issues-for-hiring-employees/

IP issues when working with contractor or on contract

Companies and individuals work a lot with contractors or on a contract basis. Margot Davis, Junior Partner at Innovate LLP, and I co-authored a blog post on IP considerations when working with contractor or on contract. This blog post is available at:

https://innovatellp.com/2019/11/06/ip-issues-when-working-with-contractor-or-on-contract/

Maximizing portfolio value through smart claim drafting – claim diversification

This is part of an ongoing series of blog posts aimed at helping patent applicants in maximizing the value of their portfolio through smart and savvy claim drafting.

As explained previously, three very important factors in determining value of patent portfolio value are:

• Likelihood of use of the claimed invention by attractive target companies,
• Ease of enforcement of infringement of the patent claims, and
• Difficulty of invalidation of the patent claims.

-   Two well-known types of patent claims are system and method claims. A system claim covers the structural features of an apparatus which has been invented. A method claim is usually a series of steps describing how an invention is to be applied. Each jurisdiction treats system and method claims differently from other jurisdictions. Since the value of a patent portfolio is heavily driven by the value of the United States (US) patents within the portfolio, the rest of this discussion will focus on US patents.

Under US law each of these types of claims have advantages and disadvantages when it comes to ease of infringement and difficulty of invalidation. System claims may be more difficult to enforce than method claims, because of the need to point to an underlying apparatus. However this potentially makes system claims more difficult to invalidate. Also, to prove direct infringement of a system claim via use, the Federal Circuit Court has stated that in order to prove an infringing “use” of a system under 35 USC 271(a), a patentee must demonstrate use (i.e., “control” and “benefit”) of the claimed system by an accused direct infringer. Further, the Court held that “to use a system, a person must control (even if indirectly) and benefit from each claimed component.” The direct or indirect control required “is the ability to place the system as a whole into service.” For make and sale, the manufacturer would be subject to a direct infringement claim for having made, sold, or offered to sell the infringing apparatus.

Method claims may be easier to enforce due to not needing to show an underlying apparatus. However this also makes them easier to invalidate. Furthermore there are other legal defences which can be used against method claims. For example, the Federal Circuit Court ruled in NTP vs. RIM (2005) that for a method claim to be infringed by a process, every step in the process must be practiced in the US. In performing its analysis, the Court noted that Congress has expressed the view that method claims can only be infringed under the “use” category of infringement, and held that RIM had not sold, offered for sale, or imported the entirety of the method. If a step of the process is practiced outside the US, then the process does not infringe the method claim. The Federal Circuit has confirmed this reasoning in subsequent cases. A major issue with method claims in the US is “divided” infringement, that is, where different parties perform the steps described.

Claim diversification, that is, drafting different types of claims, is a good strategy to improve scope of coverage by targeting multiple potential infringement scenarios.

Here are two examples of how claim diversity can be used to improve the scope of protection:

Example 1: Patent for a software application or “app”

A high level approach to utilize claim diversification in a patent for an app is:

1)  Draft a set of system claims targeted towards the implementation of the system on the client side or user device side: This set of claims could be used to target either the producer of the app or the vendor of the app, as these parties would have made and sold the app.

2)  If the app performs functions on the server-side, then it is worthwhile to draft a set of system claims targeted towards the implementation of the system on the server-side. This set of system claims could be used to target a service provider.

3)  Draft one or more sets of method claims targeted towards the producer and/or the vendor of the app, using the previously described three step approach for writing targeted method claims towards software app producers/vendors.

Example 2: Patent for a physical product

A high level approach to utilize claim diversification for a patent for a physical product is:

1)  Draft one or more sets of system claims targeted towards the physical product: This set of claims could be used to target the manufacturer of the physical product or the vendor of the physical product, as these parties would have made or sold the physical product.

2)  Draft one or more sets of method claims targeted towards the manufacturer and/or the vendor of the physical product, using the previously described three step approach for writing targeted method claims towards physical product manufacturers/vendors.

As explained previously, the fact pattern of each case may be unique; and the future state of US patent law is uncertain and unpredictable. A further technique which can be employed by a patent strategist to address both these issues is by filing continuation applications to keep the family alive. The strategist can therefore adapt the claims to ever-changing patent law and to address different fact patterns and potential targets.

New USPTO Patent Guidelines and Important Considerations for Software Patent Applications

The USPTO issued new patent subject matter eligibility guidelines on January 7, 2019, which may improve certainty and make it easier to obtain software patents. Margot Davis, Junior Partner at Innovate LLP, and I co-authored a blog post on important considerations for software patent applications in light of these new guidelines. This blog post is available at:

https://innovatellp.com/2019/02/07/new-uspto-patent-guidelines-and-important-considerations-for-software-patent-applications/

Cybersecurity and intellectual property flight risk reduction

Cybersecurity has become increasingly important and relevant to businesses. According to the Canadian federal government, about 70% of Canadian businesses have been victims of cyberattacks. According to IBM the average consolidated total cost of a data breach in 2016 was CAD 4 million. This cost is likely to further increase.

A major reason for cybersecurity is the protection of trade secrets. In Canada, trade secrets are, as explained by Justice Biron in the Positron Inc. v. Desroches et al. case “…usually formulas, manufacturing processes unique to its owner and which have been revealed confidentially to an employee”. Justice Biron further explained that “[a trade secret is] knowledge or ‘savoir-faire’ belonging to the employer and revealed by him for the sole purpose of permitting the employee to produce what the trade secret enables him to do.”

In the United States (US), the Defend Trade Secrets Act (DTSA) defines a trade secret as “all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, another person who can obtain economic value from the disclosure or use of the information.”

A key characteristic of trade secrets is that ownership is tied to confidentiality. If a trade secret is discovered or revealed to the public, then the organization ceases to own the trade secret. As explained in a previous blog post, IP flight risk is the risk of losing valuable IP from a company. Specifically then, the risk of losing a valuable trade secret is tied to its risk of loss of confidentiality.

Then for trade secrets, IP flight risk reduction practice ties together with cybersecurity policy closely. As explained previously, IP flight risk reduction comprises three steps:

          1) Instituting an “IP aware” mindset within the company via the formulation, implementation and dissemination of an effective IP policy. Such a policy will:

a) prompt the employee to proactively consider whether valuable IP is being created;

b) explain the processes necessary to identify and secure the ownership of the IP; and

c) identify the key people and their responsibilities in carrying out the processes.

        2) Securing the company’s IP ownership by using appropriate IP ownership clauses, and

        3) Running periodic IP mining or discovery sessions to identify IP created within the company.

Applying these steps specifically to trade secrets within the cyber realm:

Step 1: Instituting an “IP aware” mindset within the company via the IP policy.

A well formulated IP policy will:

a.       Prompt the employee to proactively consider whether a valuable trade secret is being created;

b.      Explain the processes necessary to identify and secure the confidentiality of the trade secret, including cybersecurity processes; and

c.       Identify the key people for process implementation, including cybersecurity processes.

Step 2: Securing the company’s trade secret ownership via agreements or clauses in agreements

The following should be used to maintain trade secret confidentiality:

a.      Appropriate agreements such as non-disclosure agreements, including outlines of “best practice” cybersecurity measures.

b.      Appropriate clauses in agreements such as employee, contractor and partnership agreements, including cybersecurity specific clauses.

Step 3: Running periodic mining or discovery sessions

Periodic IP mining or discovery sessions should be utilized to discover and document trade secrets created within the company. By doing this, vital trade secrets can be identified and ownership of the trade secret can also be documented. Finally, the value and importance of the trade secret can also be documented. The cybersecurity team should be informed of the results of these processes.

Good IP flight risk management practice complements cybersecurity in the following ways:

-       Identifying valuable trade secrets as a precursor to being secured: Good identification results in better tracking and securing of relevant trade secrets, resulting in more complete coverage.

-       Prioritizing trade secrets based on the importance to the organization: Once trade secrets have been identified and the value to the organization has been determined, the cybersecurity team can set the required level of protection accordingly.

-       Better regulation of access: As part of the prioritization process, the cybersecurity team can determine who has access and provide temporary access on an “as-needed” basis to trusted employees. This makes management and securing of trade secrets easier.

-      Deterrent to misuse and misappropriation: If an action involves misuse or misappropriation of a trade secret, then the party carrying out the action may be punished. The determination of misuse/misappropriation and corresponding punishment depend heavily on factors such as:

o   measures taken to maintain confidentiality;

o   the degree to which the owner regards and treats the information as confidential;

o   the degree to which the recipient regards and treats the information as confidential; and

o   whether the recipient ought to have known that the information was confidential;

Therefore the combination of a strong IP flight risk reduction strategy and cybersecurity policy makes it likely that misuse or misappropriation is likely to result in harsh punishment. It also signals message that the organization takes trade secret protection seriously. Together these act as deterrents to misuse and misappropriation.