Minding Your Trade Secrets in the Age of COVID-19

Wednesday, September 30, 2020

There’s been a fair amount of talk in recent months about how many companies have changed their operations, and in some cases, their fundamental business models, in the age of COVID.  There’s also been some concern that, in the course of making those changes, some companies may be placing their trade secrets at risk, albeit unwittingly.  So, as a litigator whose casework involves trade secret claims, I thought it worthwhile to revisit a few points on the topic, from a high-altitude view.

New Technologies and Innovations.  We know that in recent months, many companies have put their know-how and capabilities to use in new and different ways.  Think, for example, the ventilator and PPE production that many companies jumped into in response to COVID.  Additionally, some companies have developed new ways for conducting their core business in response to, or as a result of, COVID.  In doing so, those companies, or at least many of them, have been acting quickly, possibly at the expense of taking the necessary precautions to protect their trade secrets.  It’s also possible that those companies may have disclosed trade secrets without an NDA in place.  Or, they might have developed new capabilities in collaboration with another company without clarifying who owns what in terms of the resulting IP.  With all of that said, consider whether now is a good time for your company to review what it’s done recently in the way new developments, and to identify any chinks in your company’s trade-secret protective armor that can and should be strengthened. 

Information/Data Security.  So many of us work remotely now, or at least more often than in the past. Consider whether remote work is putting your trade secrets at risk.  Are your employees accessing your company’s sensitive information in new and less secure IT environments?  Are you noting whether recent changes in your operations are compromising the security of your company information?  Do your employees know how to encrypt the information they’re emailing?  Do you have appropriate security features in place for videoconferencing?  Are your employees using those features?  Are they trained to recognize the ever-emerging phishing and other scams, which target a company’s data and devices?    

Training.  From both a legal standpoint and the standpoint of maintaining your competitive edge, it’s important to train your employees to protect your trade secrets.  For each employee, training should not be a one-time-only proposition.  It should be done as needed, as you develop and cultivate new and unique methods, technologies, and know-how that may qualify for trade-secret status.  You also should consider developing a schedule to ensure that your new-hires are trained early on in their employment, and that your veteran employees receive refresher training on a routine basis.      

Workforce Mobility.  We’ve seen many layoffs within the past several months.  There’s mobility within the workforce.  Make sure you have the protocols and procedures in place to protect your trade secrets from disclosure by departing employees.  For those already let go, consider whether you can demand the return of trade secret or other sensitive information under their former employment agreements or your company policies.  And send each one a letter reminding them of the restrictions on their use of your company’s trade secrets and confidential information.

Don Orlandoni
313.225.5314
orlandoni@butzel.com

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