The best way to learn to cycle is to get on the bike

There’s an easy way to learn how to cycle. It basically involves getting on the bike and learning by trial and error. Yes, one can read about cycling, watch educational videos, talk to others who can cycle, study all of the components of a bicycle, take a physics degree, etc. but one should note that one cannot learn to cycle without actually getting on a bike and learning by doing about balance and coordination.

Trade secret asset management

We suggest that the same applies to trade secret asset management. Yes, organizations can read about trade secret laws, digest published case studies, talk to other companies who are doing it well, etc., but at some point, we suggest that the organization will just have to get on the bike and learn by trial and error about balance and coordination with respect to these valuable but fragile assets.

Education of employees

The importance of the education of employees about trade secrets cannot easily be understated enough. It is a self-enlightening process. It is crucial to the overall development of the individual participant and the company or organization at large. Trade secret education provides the participant with knowledge about the world of trade secrets and enables informed decisions to be made.

Trade secret education makes the participant capable of interpreting things rightly and applying the gathered information in real-life scenarios. Trade secret education is not limited to the course material or case studies. Real trade secret education is obtained from then taking these learnings into use in real-life situations.

The organization’s first attempt at educating all of their employees about trade secrets may not be perfect. But that interaction with employees is really valuable. What questions were asked? What concerns were raised? How should the course material and delivery be improved? Who needs more advanced trade secret training? Is the training on trade secrets in alignment with how other forms of IP are handled?

Trade secret policy

A corporate trade secret policy is a formal declaration of the guiding principles and procedures by which the organization will operate, typically established by its board of directors, a senior management policy committee, or by the Legal / IP function within the organization

The first iteration of the organization’s trade secret policy may need enhancing. It may not properly address all aspects. It may for example have missed required changes to other corporate policies. But creating and deploying such a policy forces an organization to seriously consider what trade secret asset management means to the organization.

Trade secret process

A trade secret process can be seen as an agreement to do certain things in a certain way and the larger the organization, the greater the need for agreements on ways of working. The trade secret process is like the memory of the organization, and without such a process, a lot of effort can be wasted and the same mistakes can be repeated.

Yes, the first version of the organization’s trade secret process for the handling of such assets might have some weaknesses. The process may not address all events in the life of a trade secret. Perhaps the first version of the trade secret process does not address the valuation of such assets or the sharing of such assets with 3rd parties. However, creating such a process and putting it into practice provides an opportunity for great learning.

Trade secret metadata

Metadata is a set of data that describes and gives information about other data. Metadata is simply data that describes other data. Meta is a prefix that in most information technology usages means ‘an underlying definition or description’.

Metadata summarizes basic information about data, which can make finding and work with particular instances of data easier. For example, the name of the author, the date created, and the last date modified as well as file type and file size are examples of very basic document metadata.

Some mistakenly believe that because trade secrets are not registered, then the concept of trade secret metadata may not apply. Others mistakenly believe that because trade secrets are meant to be kept secret, then no metadata should exist. Wrong! Trade secret metadata summarizes basic information about the trade secret, which can make finding and working with this unique form of IP much easier.

Within an organization, there are many who could benefit from having access to some trade secret metadata such as C Suite Executives given that trade secrets are some of the most valuable assets within the company, IT and Security given the issues with cyber security; HR given the many employee issues associated with trade secrets; Finance & Accounts given the financial and tax associated linked to such assets; Sourcing & Procurement as many trade secrets are indeed shared; etc.

The organization’s first attempt at logging and tracking trade secret metadata may be poor. However, the organization will quickly learn that having good quality trade secret metadata is crucial. Such metadata serves to provide context and/or additional information about these assets.

“You can have data without information, but you cannot have information without data.” – Daniel Keys Moran

Trade secret governance

Governance is the act of governing. It relates to decisions that define expectations, grant power or verify performance. In the case of a business, governance relates to consistent management, cohesive policies, proper guidance, well-defined processes, KPIs and metrics, and decision rights for a given area of responsibility.

Trade secret governance is simply about defining the ‘rules’ for those involved in trade secret asset management within the organization. It is the process of decision-making and the process by which decisions are implemented (or not implemented). Ideally, the process should distinguish between strategic and tactical decisions.

Since trade secret governance is the process of decision-making and the process by which decisions are implemented, an analysis of the governance of trade secrets should focus on the formal and informal actors involved in decision-making and implementing the decisions made and the formal and informal structures that have been set in place to arrive at and implement the decision.

The initial attempts by the organization at trade secret governance might be amateurish. But the organization will learn by trial and error what it takes to become really professional with respect to trade secret asset management governance.

Get on your bike !

In the UK, the phrase ‘on your bike!‘ is slang, and a rude way of telling someone to go away: “Can you lend me some money?” “On your bike, mate!”. This is not our meaning here.

Rather, we suggest that organizations need to get on their bikes and learn about trade secret asset management, learning by trial and error about balance and coordination with respect to these valuable but fragile assets.

Trade secrets have been the neglected stepchild of IP.  Historically, little thought, other than perhaps a non-disclosure agreement, was given to valuing and protecting trade secrets.  The current legal and political landscape make the old approach untenable for at least the following reasons:

  • The law is changing – The Defend Trade Secrets Act passed in the USA in May 2016; The EU Directive on Trade Secrets is enacted by member state on 9 June 2018; China enhanced its trade secret laws in early 2018 with revisions to its Anti Unfair Competition Law.
  • Changes in the eligibility requirements and enforcement mechanisms of patent laws around the world, but especially those in the US – and especially as they relate to software and business methods, make trade secrets an attractive mechanism to protect a company’s competitive advantages
  • Cyber-crime – whether from competitors or State actors – are working overtime to trying to steal trade secrets from organisations
  • More and more companies are embracing open and outsourced innovation models which necessarily requires sharing and collaborating on trade secrets with others.
  • Changes in employment models are leading to a highly mobile and transitory workforce where companies have increased risk their employees being poached by actual or potential competitors often with the goal of leverage the employee’s trade secret-rich know-how.
  • There is growing interest in trade secrets by the tax authorities – OECD BEPS Guidelines include trade secrets as an intangible asset requiring proper management; Patent Box Tax Regimes in a number of jurisdictions now allow trade secrets as qualifying IP; The US Government is encouraging US companies to repatriate their IP back to the US.
  • Last but not least, we are seeing increased trade secret litigation especially for US companies but not exclusively so.

Organizations need to get on their bikes.

by: Donal O’Connell. Donal is IPEG consultant.