Free Essay

Trade Secrets

In: Other Topics

Submitted By bestman
Words 1088
Pages 5
Protecting Trade Secrets With the expansion of technology over the past several decades, the availability of the internet as well as our reliance on it, and emerging powers such as China and India, trade secrets become more valuable and harder to protect. Whether it’s computer hacking a corporation’s network, a military mainframe, or spying for another country, also called espionage, it takes a wide array security measure to protect information from leaking or being stolen by our advisories. These security measures fall with the realm of IT, background investigations, and facility security. It is obvious, given past espionage events; these procedures are not always effective. Trade secrets, by definition, is considered to be a formula, practice, process, design, instrument, or compilation of information, hardware, technology, or some other means of proprietary information which is not generally known by the public or outside of the entity that protects. A trade secret gives a business the ability to obtain an economic advantage over competitors or customers. In some legal jurisdictions (states), these secrets are referred to as "confidential information", and are generally not referred to as "classified information" in the United States, as “classified information” refers to government secrets protected by a different set of laws and practices. Although, it is very important to note that the government, but more specifically the military and NASA have issues with protecting trade secrets. Both the United States military and NASA have been and continue to be targets of cyber hacks from nation states. Emerging super powers such as China and India, among others, attempt to hack into protected systems to steal trade secrets. Understanding that a trade secret under U.S. law is defined under 18 U.S.C. § 1839 (3) (A), (B) (1996), has three parts: (1) information; (2) reasonable measures taken to protect the information; and (3) which derives independent economic value from not being publicly known." Granted, NASA and the military do not gain economically; they are involved in acquisition and trade with foreign partners and they do contract private companies such as BAE and Lockheed Martin in the development of their material and equipment. An excellent example of hacking into U.S. systems was in May 2013 when U.S. officials confirmed that plans for dozens of critical weapon systems where stolen by Chinese hackers. The report did not identify the types of weapons systems compromise; however, it did state that China saved billions of dollars of combat advantage. It also stated that it saved China at least 25 years of research and development (businessinsider, 2013). In addition the report supplied a partial list of compromised designs that included the F-35 fifth generation fighter jet, the V-22 Osprey, THAAD missile defense system, the Patriot missile defense system, and the Global Hawk high altitude surveillance drone. Hackers also accessed Personally Identifiable Information, including vast quantities of military email addresses, SSN, credit card numbers, and passwords (businessinsider, 2013).
As mentioned earlier, security is the primary priority for companies protecting their trade secrets. Some of the examples with regards to security are Non-Disclosure Agreements (a legal statement swearing to not discuss of divulge information about what they experience without the consent of the originator), background investigations (usually conducted by someone contracted out by the company of hire to check into the live of the employees or potential employees to determine if they are suitable for possessing knowledge or access of the companies secrets), and technical security (scanners, security cameras in sensitive areas, safes, access cards, and monitoring of computer systems within the given company or organization). The impact of espionage on a company can vary from company to company and also depends on the secret that is compromised. The spectrum could be as little as a company having to change course on what they make, an ingredient, or a way of treating customer, to putting a company in financial ruin; costing the company billions of dollars. A variable that needs to be addressed is if it’s a foreign company or nation that steals the secret and how they use it. For a hypothetical example, if India was able to acquire the ingredients for Pepsi, they would not have to import it and would possibly be able to export it to surrounding countries; this would not only have an economical effect on the Pepsi, the U.S. economy, but also on economies overseas. Something like this would take from our economy and add to another, shifting the balance. The investigation on a case like this would be limited given there are no international laws when it comes to trade secrets, not to mention proving it in a court of law. There are two yet vey similar ways of acquiring information. First being misappropriation which is the wrongful acquisition, disclosure or use of a trade secret. The UTSA defines it as (a) acquiring a trade secret through improper means or from another person knowing that the person acquired the secret by improper means, or (b) disclosing or using the secret without consent when the circumstances create a duty not to disclose or use it (, 2014). Economic espionage is the unlawful or clandestine targeting or acquisition of sensitive financial, trade or economic policy information; proprietary economic information; or technological information (, 2014). The difference between misappropriation and economic espionage according to definition is very similar, yet economic espionage seems to lend itself as being worst given its clandestine targeting. It is a major challenge to protect trade secrets if it went into an investigation of prosecution. In section 1835 of the Economic Espionage Act (EEA) authorizes a court to grant a protective order to maintain the secrecy of the purported trade secret during the EEA criminal litigation. However, this Congressional intent to preserve the confidentiality of trade secrets during EEA litigation and encourage victims of misappropriation to disclose wrongdoing to the Government may be thwarted by a defendant’s Fifth and Sixth Amendment right to prepare effectively for trial by gaining access to and reviewing the Government’s material discovery (, 2014).

References (2014, 02 20). Retrieved from businessinsider. (2013, 05 28). Retrieved from (2014, 02 20). Retrieved from (2014, 02 27). Retrieved from

Similar Documents

Free Essay

Trade Secrets

...Running head: Trade Secrets Name Course Tutor Date Introduction Economic espionage occurs when an individual knowingly shares sensitive information that may lead to financial loss or loss of a comparative advantage of the owner. Trade secrets are a form of information, formula, procedures, techniques, or prototypes that the owner has taken reasonable efforts to protect. Trade secrets have an independent economic value regardless the form they are. Economic espionage is commercially motivated. A company, individual, or government uses illegal tactics to gain commercially valuable information about a competitor. Most economic espionage involves an employee in a company bribed by a competitor to share sensitive information. The increased use of the computer and the Internet makes computer hacking another common economic espionage. In extreme cases, a competitor may hire a gang to break into the rivals premises to steal or destroy information. Trade secrets There are many methods used to gather information about rivals. Some of the methods are legal, whereas others are not. A rival may use information available in the newspaper, company reports, patent applications, and the Internet to collect intelligence regarding the activities and plans of a company. The use of unethical methods to achieve competitive advantage is on the increase. Since 1985, economic espionage on American companies has increased by 260%. In most of the cases, the aim of the espionage is......

Words: 1049 - Pages: 5

Free Essay

Trade Secrets

...There are numerous ways to protect intellectual property; one such method is through trade secrets. Unlike patents which require the secret to be inventive or non-obvious, things such as customer lists, equations, and compilation of data (which aren't eligible for copyright or patent protection) can be protected through a trade secret. Granted, though, that the company assumes the costs associated with protecting the said secret. Whereas patents expire after 20 years, and all the designs/specifications are consequently available to the public domain, trade secrets can be protected for longer; this depends on the secret holders ability to adequately establish a framework to maintain secrecy and thereby protect the intellectual property. In the cases of Coca-Cola and KFC, the process of keeping trade secrets has benefited them greatly. Granted, though, they also use a symbiotic or symphonic combination of patents, trademarks, and copyrights to protect their overall product; no competitor has been able to completely replicate their products because the processes making the syrup (for Coca-Cola) or the method of mixing the spices (for KFC) has been a closely guarded trade secret. Had these companies patented these processes, they would have received initial protection for 20 years from anyone replicating it, but would have had these processes disclosed to the public after that. Whereas these companies have been in existence for a longer time, a patent for the processes......

Words: 618 - Pages: 3

Free Essay

Trade Secret

...Trade secret In regards of Schlossberger’s suggestion that the duty to respect trade secrets has limit and is overridden, it seem more emphasizing in whistle blowing aspect. So the question rises that under what conditions is whistle blowing moral justified? In my opinion, it does not matter what one’s obligations or confidentiality agreements, one is never exempt from the general obligations we have to our fellow human beings. One of the most fundamental of these obligations is not to cause harm to others. In particular, obligations of confidentiality and loyalty cannot take precedence over the fundamental duty to act in ways that prevent unnecessary harm to others. Agreements to keep something secret should have no moral standing unless that secret is morally justifiable itself. Such agreements should be morally void if the organization is engaged in illegal or immoral activities. In that case, one’s obligation to the public overrides one’s obligation to maintain secrecy. For example, one cannot have an obligation to keep secret a conspiracy to murder someone, because murder is an immoral act. It is for this reason also that employees have a legal obligation to report an employer who has committed or is about to commit a felony. For the same reason, an employee cannot justify participation in an illegal or immoral activity by arguing that one was merely following orders. Some people have argued that whistle blowing is never justified because employees have absolute......

Words: 3633 - Pages: 15

Free Essay

Protecting Trade Secrets

...| How to Protect Trade Secrets in the Workplace | Business Law Research Paper | Anthony Arrieta 11-27-2015 | Trade secrets First let’s address what a “trade secret” is. It is very hard to get an exact definition of what these are but trade secrets have characteristics which most state statutes or common law recognize. They are: * Secrecy * Security * The value of the Information, and * Ease of Duplication A customer list is a classic example of information that might be considered a trade secret. The list, by itself, would probably not be a protected trade secret. It could only be protected if the customer list is not “readily ascertainable” from sources outside the particular company. For example, a list of customers revealing their monthly purchases would more likely constitute a trade secret. The mere listing of customer names and addresses which could be obtained from a telephone book, would probably not constitute a protected trade secret. Protecting trade secrets in the workplace is a very important part of running a successful business. Keeping parts of your business secret will differentiate you from the rest of your competitors and if you are succeeding in the industry it will keep you at the top of the industry. Successful companies stay on the top because they protect their most valuable information. Companies like Coca-Cola have protected their “secret” formula for 125 years (Coca-Cola, 2015). This is not the only reason......

Words: 2969 - Pages: 12

Free Essay

Justification of Protection of Intellectual Property Vis-a-Vis Trade Secrets

...Justification of Protection of Intellectual Property vis-a-vis Trade Secrets PAPER V Submitted By: SARTHAK KAPILA ROLL NO. 48, P.G.D.,I.P.R. – 2014 Justification of Protection of Intellectual Property vis-a-vis Trade Secrets Intellectual property pertains to any original creation of human intellect such as artistic, literally, technical or scientific creation. Intellectual Property Rights (IPR) refers to the legal rights given by the State to the inventor/creator to protect his invention/creation for a certain period of time. These legal rights confer an exclusive right to the inventor/creator or his assignee to fully utilize his invention/creation for a given period of time. Countries have laws to protect intellectual property for two main reasons. One is to give statutory expression to the moral and economic rights of creators in their creations and the rights of the public in access to those creations. The second is to promote, as a deliberate act of Government policy, creativity and the dissemination and application of its results and to encourage fair trading which would contribute to economic and social development. The term ‘Intellectual Property’, denotes rights over intangible object of the person whose mental effort created it and refers to a loose cluster of legal doctrines that regulate the uses of different sorts of ideas and insignias. The subject matter of intellectual property is very wide and includes literary and artistic works, films,......

Words: 8264 - Pages: 34

Free Essay

Professional Values and Ethics in Corporate Americal

...Abstract Everybody in America wants to be wealthy. We also want to be well-known and well-respected in society. The desire to be successful in our careers and profession we choose is just as important. To be successful an individual would choose a profession that would allow them to advance and climb the corporate ladder. Each and every profession has a standard code of ethics and professional values. Likewise, each has their own set of codes within the corporation or company. A person choosing their profession should really consider their own values and ethics before pursuing a professional career in an area that would later be conflicting with ones self-conscience. Professional values are usually framed from our own personal values. The customs, beliefs, and ideas we hold dear are our values. Ethics are the things we think of as right and wrong. A person who has high values and ethic should reconsider the job offer if they feel the corporation is dishonest Professional Values and Ethics Sexual Harassment “Professional values are the principles that guide your decisions and actions in your career.” According to Chrissy Scivicque, there are some universal values that should be and usually are held and practiced in all of them and they are: “first, do no harm; keep it simple; honesty is the best policy; we’re all in this together and stay balanced.” Professional ethics concerns the moral issues that arise because of the specialist knowledge that......

Words: 1713 - Pages: 7

Premium Essay

The Law

...ISSUE: Whether the fact that the customer information was in an employee’s memory allows him to use with impunity the information that was otherwise a trade secret under the statute. RULE: As a general rule, an employee who has not signed an agreement not to compete is free, upon leaving employment, to engage in competitive employment. However, the former employee, even in the absence of an enforceable covenant not to compete, remains under a duty not to use or disclose, to the detriment of the former employer, trade secrets acquired in the course of their employment. ANALYSIS: It is evident that the employees obtained confidential information while working for Nowogroski. It is also evident that these employees used client lists and other information that was obtained at Nowogroski to get business for another agency. Three rules can be looked at to decide whether a customer list is protected as a trade secret: ( 1) whether the list is a compilation of information; ( 2) whether it is valuable because it is unknown to others; and ( 3) whether the owner has made reasonable attempts to keep the information secret. CONCLUSION: Yes, although a former employee may use general knowledge, skills, and experience acquired during the prior employment in competing with a former employer, the employee may not use or disclose trade secrets belonging to the former employer to actively solicit customers from a confidential customer list, whether written or memorized.   Wal- Mart......

Words: 502 - Pages: 3

Premium Essay

Intellectual Property Clause

...Barnes Intellectual Property Clause Intellectual Property, or IP, is a broad term defining the intangible assets of a company. These assets may include special skills or talents, inventions, technologies such as software, relationships with customers or vendors, and brand identity. These examples of IP, and many more, are often among a company’s most valuable resources, and there are specific laws designed to protect them. Trade secrets, patents, trademarks, and copyrights define and control ownership rights to IP, and businesses further protect those rights by drafting IP clauses when they enter into contracts with individuals or other businesses. (Reed, Pagnattaro, Cahoy, Shedd, & Morehead, 2013). The purpose of an IP clause is to identify IP as it pertains to the respective contract, define authorized and/or unauthorized use(s), and incorporate this information into the original contract, which makes it legally binding (Connock, 1994). The following is an example of an IP clause: “Intellectual Property,” or “IP,” refers to the trade secrets, copyrights, trademarks, patents, and patentable ideas relating thereto of Developer, including but not limited to the know-how, inventions, technologies and technical data relating thereto, processes and methods of business operation, reports, manuals, other documentation and all information relating thereto, databases, pre-existing and future relationships with customers and suppliers, software, new product research,......

Words: 1104 - Pages: 5

Premium Essay

Business Law Chapter 9

...Chapter 9 3. Turner Company owned and operated a cable television business. The company owned more than 780 miles of feeder cable. The cable was annexed to telephone poles owned by BTT Telephone Company under a lease that required removal of the cable if BTT should need the space for its own service needs. Butte County assessed the Turner Company cable as real property because it is properly classified as a fixture. Is the county correct? Why? A fixture is defined as personal property that has become attached or annexed to real estate; a fixture generally is treated as part of real estate. There are certain things considered when determining whether or not the item will be considered as a fixture. First, it will need to be determined whether the fixture is included in the real estate for tax purposes. Second it would need to determine if the sale of the real estate will include the item of property. Third, it will need to be determined whether the item is covered by the mortgage and fourth, if the item belongs to the landowner, not the tenant that could be terminated of a lease. Base on information above, although the cable was annexed to the telephone poles, it was based on a lease, it did not belong to the landlord owner, therefore it could not qualify as a fixture. In addition, the cable is not included in the value of the property nor is it part of a security given by mortgagor. The cable is an item that can be removed in which will not change the value of the......

Words: 1129 - Pages: 5

Premium Essay

Business Law

... that she was required to sign upon working for Greene's, when she took secret information to multiple competing jewelers. The agreement was a valid bi­lateral contract which was expressed in writing. To qualify as a contract, a set of promises must be based on a voluntary agreement, which is made up of an offer and an acceptance of that offer. Any court will need to know the terms each party has agreed upon to determine if there was a breach of contract and calculate a remedy. In the case of RRK Holding Co. v. Sears, Roebuck and Co. (United States District Court, N.D. Illinois, Eastern Division 563 F.Supp.2nd 832 ­ May 27, 2008), the jury’s calculated remedy cost Sears $25 million for misappropriation. By providing documentation of the NDA, signed by Ms. Lawson at the time of her initial employment, the plaintiff can display the defendant’s understanding and thus blatant and reckless disregard of her responsibility to not disclose any information pertaining to the patented process for producing “Ever­Gold.” Also, by providing the court with her initiated and signed contract with the plaintiff’s competitor, Greene’s is able to prove that Ms. Lawson knowingly gave this information away for gain. A winning case showing contract violation is PC Connection, Inc. v. Stephen P. Price (US District Court, D. New Hampshire ­ Case No. 15­cv­208­PB. No. 2015 DNH 202 ­ October 29, 2015). Moreover, this secret formula given to the competitor, Howell Jewelry World, was tweaked by......

Words: 1149 - Pages: 5

Premium Essay

Article Review

...This article is about Apple and their history of legal disputes between Apple, the computer company, and Apple, the Beatles’ record company. The disputes were about the same thing every time and that was their similar logos. The two companies have gone to court twice for this before. They went to court in 1981 and in 1991. They are now going back to court saying that the computer company is over stepping its bounds of the agreement that has been made. There are four types of intellectual properties. The types are copyrights, patents, trademarks, and trade secrets. “A patent grants property rights on inventions, allowing the patent holder to exclude others from making, selling or using the invention. A trademark is a word, phrase, symbol, or design that distinguishes the source of the goods of one business from its competitors. A trade secret is a formula, process, device, or other business information that companies keep secret to give them an advantage over their competitors. Copyrights protect original works of authorship, such as literature, music, artistic works, and computer software ("Four Types of Intellectual Property Protection", 2014).” There are many issues that can come with e-business. For example when it comes to intellectual properties you need to be careful...

Words: 516 - Pages: 3

Free Essay

Response Attacks

...Responses to Attacks Responding to Attacks on Computers Threats to an organization’s computer systems come from a variety of sources. The motivations for computer attacks are as different as the attackers themselves. For example, a group of organized criminals may carefully execute an attack on your computer system, hoping to gain confidential information they can sell to competitors or use to extort money from your organization. Industrial spies may try to steal a company’s secret plans for a new product. Cyber-terrorists with political or religious motivations may attack an organization or government with which they disagree. Amateur hackers may access systems to plant their virtual flag and earn merit badges in the hacker community. Occasionally, bored teenagers may hack into a system just to prove they can. Cybercrimes have a direct impact on privacy. An organization’s failure to adequately protect information can lead to disaster, so the necessity for good data security is absolute, and a fiduciary responsibility of corporate management. However, even though data security and privacy have a relationship, the concept and practice of data security is generally geared toward restricting data access. This restriction does not automatically safeguard the privacy of users. If organizational policies on the use or sale of sensitive information are not appropriate, privacy problems can still surface, even though the information and technology are secure. In many ways...

Words: 592 - Pages: 3

Premium Essay

General Code of Conduct

...General Code of Conduct The company expects the employees to exercise sound judgement and safeguard the interest of every individual working under the organisation. The comrades are expected to maintain a healthy, cooperative, positive and sound working environment to increase the productivity of the work. These standards apply while working for the company whether inside the premises or at some offset location or any other company event. The company is committed to work ethically and maintain the safety and protection measures for the employees. Every employee is expected to follow the code of conduct and respect others religious and emotional sentiments. In case of any violation of the code, the decision of the chief regional officer shall be binding and the jurisdiction of the area shall be binding. The employees are expected to follow the chain of command as listed down in the company’s circular provided to each employee at the time of joining. Anyone not doing so shall be held liable for wrong doings and will be prosecuted for disregarding the interest of the company. Hierarchies should be followed along with cross-departmental communication for efficient working and synergy should be maintained while doing so. Some other ethics to be followed by the members, employees, directors and anyone associated with the working of the company are: Honest and Ethical Conduct The company expects its employees to be honest and maintain their moral values at all the times......

Words: 1281 - Pages: 6

Free Essay

Draft Confidentiality Agreement

...Confidentiality and Non-disclosure Agreement between ______________________________ (herinafter referred to as “X”) Registration number: ______________________ Adress: and (herinafter referred to as “ The Client”) Registration number/ ID number: Address: WHEREAS the parties are discussing certain matters which require each party to disclose certain proprietary, secret or confidential information (“the information”) to the other party; AND WHEREAS the parties acknowledge that the information exchanged between them must be kept confidential and have therefore agreed to enter into this confidentiality; NOW THEREFORE the parties acknowledge, agree and undertake as follows: Whereas, 'The Client’ and 'X’ has certain confidential information which it desires to disclose confidentially to each other relating to client information provided by him including but not limited to trade secrets and proprietary information pertaining to finances, marketing plans and techniques, forecasts, operational structures and methods, pricing policies, customer lists and other proprietary, private confidential business matters, all hereinafter referred to as the INFORMATION, and both parties hereby agree that this two way exchange is for the sole purpose of evaluating potential business opportunities involving each party or one or more subsidiaries of each party. The parties agree as follows: 1. Information: Each under...

Words: 1471 - Pages: 6

Premium Essay

Harvard Case Lego

...worrying about potential steal of knowledge, LEGO could work to strengthen their relationship with their tool suppliers, which could ultimately lead to building trust. Preventing knowledge spillovers is hardly practical. Employees who left a company carried knowledge in their heads with them, so they posed a spillover risk, especially in the emerging market where loyalty to a firm was low and multiple companies set up manufacturing plants within small geographical regions. Even if it were possible, the cost would be really high. In this case, it might involved setting up a secret and highly isolated manufacturing plant where only certain people are allowed to have access and all bound by contract or some kind of agreement to disclose everything. Question 2: How should the LEGO group protect their intellectual property of the molding platform? Focus on the trade-off between patenting, trade secrets and open disclosure. Obtaining a patent...

Words: 661 - Pages: 3