Looking to the future

As trade secrets gain importance, companies must take reasonable steps to understand the threats to their trade secrets and how to ward against them. However, companies must overcome significant hurdles in order to successfully safeguard their trade secrets.

Problems with protecting secrets

What are the biggest obstacles to safeguarding trade secrets? (% of responses)

Our survey identifies a clear gap in cybersecurity expertise. This gap reflects a dearth of IT talent, but it also reflects poor adoption of cybersecurity best practices across organisations. It is more important than ever to stay ahead of the curve in terms of cybersecurity innovations, and to source the necessary skills to navigate and implement those innovations. 1
https://akki-greatlearning.medium.com/advanced-cyber-security-innovations-and-updates-for-2020-65b8d48fc256

Cybersecurity is everyone in a company’s responsibility. It is a team sport, and has real commercial business implications.
Anil Cheriyan, Executive Vice President, Strategy and Technology at Cognizant

We often see enterprises using off-the shelf non-disclosure agreements (NDAs) but the Trade Secrets Directive makes it important to review and align NDAs to main agreements. While cybersecurity is important for electronic documents, physical versions must also be safeguarded–paperwork lying on a desk might not be considered a trade secret. The directive also requires entities to take ‘reasonable steps’ to protect trade secrets. This could mean that large companies would have to take more stringent measures.
Dirk Loycke & Aukje Haan, Co-Heads, Commercial Group, CMS

For a third of respondents, a further obstacle is a lack of experience and awareness of trade secrets. It is hard to protect trade secrets if employees are not aware of their value or sensitivity. This is a particular pain point for the energy and natural resources sector, the technology, media and telecommunications sector, and the manufacturing sector, three sectors that are particularly vulnerable to trade secret theft due to the high levels of innovation needed in their output. 2
https://s3-eu-central-1.amazonaws.com/evermade-fsecure-assets/wp-content/uploads/2019/04/15105531/F-Secure_energy_report.pdf; https://iiot-world. com/ics-security/cybersecurity/industrial-espionage-is-a-major-threat-to-the-manufacturing-sector/; https://www.pwc.com/it/it/publications/docs/ study-on-the-scale-and-Impact.pdf

A third of survey respondents also report difficulty in supplying sufficient proof of trade secret misappropriation. To overcome this, companies can develop and implement a holistic trade secret strategy that enables them to properly classify, value and protect confidential and commercially valuable information. 3
http://www.rmmagazine.com/2019/06/01/the-reality-of-trade-secret-protection/

Leveraging the latest technology can be instrumental here for example, using blockchain to prove the existence and protection of secrets. 4
https://www.bernstein.io/blockchain-and-trade-secrets Another approach may involve seeding data to prove copying of databases. 5
https://www.itgroup-uk.com/news-insights/how-seeded-data-could-help-protect-your-intellectual-property/; https://www.dataiq.co.uk/articles/articles/ seed-you-court Without such a strategy, protecting trade secrets may remain an uphill battle for many.

As companies navigate accelerated digitalisation, greater flexibility in working practices and fragile economic conditions in the post-covid-19 era, the threat of trade secret misappropriation is growing. 6
https://www.natlawreview.com/article/trade-secret-seesaw-after-economy-goes-down-cases-go As our survey shows, the prioritisation of trade secrets is moving beyond legal departments, with corporate executives increasingly conscious of the threats posed by cyber risks and internal leaks. With these heightened threats comes a louder call to action for all levels of an organisation to take proactive measures to raise awareness around trade secrets, and take reasonable steps to ward off any risks to their crown jewels.

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Looking to the future

As trade secrets gain importance, companies must take reasonable steps to understand the threats to their trade secrets and how to ward against them. However, companies must overcome significant hurdles in order to successfully safeguard their trade secrets.

Problems with protecting secrets

What are the biggest obstacles to safeguarding trade secrets? (% of responses)

Watch CMS external launch of Open Secrets report