Fighting economic espionage with state trade secret laws

Abstract

PurposeThe purpose of this paper is to provide an overview of trade secrets, reasonable steps to preserve secrecy, trade secret value, misappropriation methods used to acquire trade secrets, various legal remedies, and internal controls to protect trade secrets.Design/methodology/approachA sample of types of civil trade secret cases is highlighted. The paper includes a statutory and legal case study analysis of the elements in a civil trade secrets lawsuit. Analysis of actual trade secret court cases illustrates the importance of private civil lawsuits in combating intellectual property fraud.FindingsThis paper shows the serious impact of trade secret espionage on the success and survival of businesses and the necessity of proving each element of a civil claim under state trade secret law. Also, practical steps necessary to protect an entity's trade secrets are discussed.Practical implicationsThis paper raises the awareness of executives, managers, internal and external auditors, forensic accountants and other interested parties about the severity of trade secret espionage. Also, this paper highlights numerous steps to protect trade secrets.Originality/valueThis paper fills an identified need to inform those involved in the fight against economic crime about the importance of state trade secret laws and internal controls in the fight against intellectual property fraud.

Potential Improvements in the Laws of the Republic of Latvia Concerning the Protection of the Trade Secrets

“…13 It is interesting to add that quite often trade secret protection is chosen over patent protection, even when the latter is available, because the trade secrets can be everlasting, are apparently cheaper and faster to protect, and do not (obviously) require disclosure. 14 As the property, trade secret may be sold and alienated by other means. 15 Also, even without the alienation, the disclosure of the trade secret may be the subject matter (or one of the subject matters) in, for instance, the franchise or licensing agreement.…”

“…26 Other measures may include concluding of a confidentiality and non-disclo sure agreement, limitation of access to the trade secrets by the personnel not required to access these trade secrets in order to perform their duties, conducting the exit interview with the employee leaving his/her position, when, inter alia, he/she could be reminded about the duty to keep the learned trade secrets confidential and to refrain from using them for his or her own benefit, as well as advising employees of existence of the trade secret. 27 Regarding the last measure, one may ask to what extent the employer should be specific in advising the employees that the particular information is a trade secret. Should the employer label all such information explicitly as a trade secret, but if he, she or it has failed to attach such a label to the item in question, does the employee have to treat this information as a trade secret and is he or she not obliged to keep it confidential?…”

Risk management of the intellectual property in knowledge process outsourcing

“…In the offshore outsourcing, 70%-80% of employers think the business secrets are more important than other intellectual property [15]. So the safe and effective protection of business secrets is the key to the protection on intellectual property in the offshore outsourcing.…”