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Trade Secrets and Employee Loyalty

Talhiya Sheikh*, Intern, SMEs Division, WIPO Introduction In today?s competitive business environment, employees can ?make or break? an enterprise when it comes to intellectual property (IP) protection. While there are several legal and technical mechanisms that can be put in place for protecting IP assets of enterprises, employee loyalty remains one of the biggest challenges faced by enterprises in protecting their IP. This article discusses the need for enterprises to build strong employee loyalty as a key element in thier strategy for protecting trade secrets. The article draws attention to the principle ways that could be followed to obtain trust and commitment from employees, thus discouraging them from unauthorized disclosing the trade secrets of an enterprise. The adage ?information is power? is very relevant to the whole concept of strategic use of trade secrets. When used strategically, trade secrets often provide a significant competitive advantage in the market place. Further, trade secrets can be central to the creation of a market niche which competitors may find it difficult to penetrate. Competitive advantage is often acquired by simply keeping strategic information confidential or secret as outsiders are prohibited by law (in most countries) to use or copy secret or confidential information without the consent of the owner of that information. The law of trade secrecy discourages espionage/unlawful access to such information by punishing those found guilty of accessing information by improper means. Trade secrets are but one tool amongst a collection of different intellectual property tools and when used appropriately complement and strengthen the other tools. Enterprises that successfully protect their trade secrets strengthen other IP assets that they have; for example, when Coca-Cola protects its secret formula as a trade secret, by doing so it also strengthens its trademark. Since the market is changing so rapidly, and the fact that trade secrets can be independently discovered by others, enterprises are advised not to rely only on their existing trade secrets but to make continuous efforts to develop new trade secrets in order to remain competitive. In addition, this will be helpful in case of unwanted disclosure because the enterprises would be able to rely on a newer and better product or plan.

Full post as published by The Trade Secrets Vault on February 04, 2008 (boomark / email).