11 Steps to Secure Your Business’s Trade Secrets and Prevent Litigation
Foreign cyberattacks that steal intellectual property from U.S.-based companies continue to make headlines, urging many American firms to boost their computer networks and online security systems to thwart hacks.
However, it appears that the greatest threat to your business is within your company. That threat could be either an employee or a business partner. A 2014 study showed that employees or business partners are accused of misappropriating trade secrets in 85% of such lawsuits in both state and federal courts.
Trade Secret Lawsuits on the Rise in the U.S.
The rates for trade secret litigation in Florida and across the U.S. have skyrocketed in recent years and decades. From 2001 to 2012, the number of federal trade secret suits increased by 14% for each year, according to a 2016 study.
Interestingly, trade secret owners prevailed in the vast majority of such lawsuits. In the year following the enactment of the Defend Trade Secrets Act (DTSA), one study identified 280 federal trade secret cases. Of those that made it to trial, the plaintiff won 69% of the time and obtained compensation.
For the sake of comparison, plaintiffs in civil lawsuits prevail less than half the time. Nonetheless, every business owner would be better off securing trade secrets instead of having to defend their company’s interests through business litigation.
If your current or former employee or another individual/entity is misusing or misappropriating your trade secrets, consider getting an injunction.
How to Secure Your Company’s Trade Secrets?
Time and time again, courts in Florida have ruled that companies need to take “reasonable steps” to protect their intellectual property and confidential corporate assets. These “steps” should include boosting computer networks to protect from external threats and guard against potential thieves within the company through business operations and processes.
Unfortunately, Florida courts do not have an unambiguous and concrete definition of “reasonable steps” when it comes to evaluating the reasonableness of a company’s measures to protect its trade secrets. Federal courts have held that creating confidentiality agreements with business partners and employees can be considered a “reasonable measure” to protect trade secrets.
However, those agreements alone cannot secure your company’s trade secrets, which is evident from numerous trade secret lawsuits in Florida and across the U.S. Firms are also expected to take a number of other steps to shield confidential corporate assets and intellectual property from external and internal threats.
An 11-Step Protection Plan to Secure Trade Secrets
The following steps comprise a comprehensive protection plan that may help secure your company’s trade secrets:
- Creating agreements and policies to establish and document trade secret protection;
- Setting forth physical and electronic confidentiality and security measures;
- Forming an information protection team;
- Assessing risks to identify and eliminate vulnerabilities;
- Monitoring corporate efforts;
- Establishing ongoing third-party management procedures;
- Securing computers containing sensitive information;
- Limiting public access to the company’s data;
- Setting up employee training;
- Labeling documents with protected information; and
- Continually improving policies and procedures.
If you or your firm has been accused of misusing trade secrets, you need a lawyer to defend yourself against misappropriation allegations. Talk to our West Palm Beach business litigation lawyers regardless of whether you are being accused of trade secret misuse or you believe that someone else is misappropriating your company’s valuable information. Contact Pike & Lustig, LLP, for a case evaluation. Call at 561-291-8298.