Don't Just Buy A Trade Secret System ' Design Your System First!

• Published date: 18 September 2023
• Subject Matter: Intellectual Property, Trade Secrets
• Law Firm: Rouse
• Author: Thomas Randes

Don't buy a trade secret system without first defining what trade secrets are and who owns them in your organization.

In today's rapidly evolving business landscape, intellectual property, particularly trade secrets, plays a pivotal role in maintaining a competitive edge. Many organizations are now looking to data applications that promise to identify and protect their trade secrets. However, purchasing such a system without first addressing the fundamental need to define, align, and coordinate trade secret management across the entire organization is a naive approach that can lead to inefficiencies and missed opportunities.

The Importance of Trade Secrets:

Trade secrets are critical assets for any business, encompassing everything from research and development (R&D) processes to production, sales, marketing, and supporting functions like IT, Finance, and Legal. They are valuable because they provide a competitive advantage, but their true potential can only be harnessed when a company has a comprehensive strategy in place.

The Pitfall of Leaving It to the IP Functions:

A common mistake many organizations make is to delegate the responsibility of trade secret management solely to the intellectual property (IP) functions, typically the legal department. While these professionals are experts in IP law, they may lack the holistic understanding of the organization's processes, functions, and the intricate details of how trade secrets are generated and utilized across departments.

The Consequences of This Approach:

1. Lack of Understanding: When the responsibility solely rests with the IP functions, other departments often fail to comprehend the importance of trade secrets and the need to protect them. This leads to a lack of alignment between departments, inhibiting the efficient use and protection of trade secrets.
2. Missed Opportunities: Trade secrets can be created and utilized in various parts of the organization. Without a coordinated effort valuable trade secrets may go unnoticed, or their potential may remain untapped.
3. Ineffective Protection: Over-reliance on legal departments can result in a compliance-focused approach, rather than a proactive strategy for protecting trade secrets. Legal teams may not be equipped to implement technical safeguards or raise awareness among employees.
4. Lack of Accountability: Without clearly defined roles and responsibilities across departments, no one takes ownership of the trade secret strategy, leaving it in a state of...