Secrets — Here are the preliminary results of a case study involving a European IP firm that has added a new trade secret services offering for its clients. This IP firm (whose name has been kept confidential) reached out to a limited number of its operating company clients to inform them about this new service offering at the beginning of the summer of 2016, just after the Defend Trade Secrets Act was passed in the US and the EU Directive on Trade Secrets was passed in Europe.
This IP firm initiated pilot projects with a handful of its clients in order to stress test the new service offering in a small-scale implementation, which will be bulked up to all its clients later. The IP Firm wished to prove the viability of this new service offering and to gather insights on various things such as their assessment methodology, the project phases, the skills and competencies of their team, the time taken to complete such assessments, the costs involved, their fees and fee structures, among other things, including studying their clients’ reactions to the new service.
As this particular case study is still in its infancy and only recently been deployed by this particular IP Firm, there is not yet much real data to share. However, their situation provides a very interesting business development case study at a time when there is tremendous pressures on many IP Firms to be more creative and innovative and bring new service offerings to market.
Background
The IP Firm in this case study is an established and reputable IP Firm with offices in a number of jurisdictions. It employs almost one hundred attorneys and paralegals, and it has clients spread across a diverse range of industry sectors.
This IP Firm has received a number of awards and accolades over the years.
The IP Firm was anxious to deploy a range of new service offerings to its clients, and trade secret asset management was one selected, as it saw some new business opportunities here.
Trade Secrets
A trade secret is defined as any information (technical or otherwise) that is:
- Not generally known.
- Confers some sort of economic benefit on its owner.
- It must have been subject to reasonable steps to keep it secret.
Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret.
Trade Secret Asset Management
Trade secret asset management comprises the policies and procedure, processes and systems, education and governance defined and taken into use to help manage such assets. Trade secrets are fragile so they require some TLC.
Simply deciding to keep something secret is not sufficient!
Trade secret asset management includes:
- Awareness & education
- Trade secret policy
- Trade secret management process
- Trade secret asset management system
- Metadata
- Access & access controls
- Protection mechanisms
- A culture of confidentiality with respect to trade secrets
- Governance
Forces at Play
The IP Firm recognized that there are a number of forces which together mean that trade secret asset management is now becoming a business critical issue, and one which companies must address.
These forces include – legislative developments; finance & tax developments; increased network security & cyber-crime concerns; IP reform in key jurisdictions; the growing importance of corporate governance; more and more companies embracing openness; and the changing nature of employment.
This IP Firm also recognized that almost all of their clients possess trade secrets but many are failing to properly manage such assets.
Trade Secret Asset Management Assessment
The IP Firm’s service offering begins with an audit or assessment of their operating company client.
Such an exercise is conducted in order to provide independent assurance that an organisation’s trade secret asset management, governance and internal control processes are robust, fit for purpose and operating effectively.
It is an evidence gathering process. The criteria include policies, procedures and requirements. Evidence includes records, factual statements, and other verifiable information. Findings evaluates evidence and compares and contrasts it against the criteria. Findings show those criteria that are being met (conformity) or those that are not being met (nonconformity). The exercise can also identify best practices or improvement opportunities.
The Assessment Criteria
The IP Firm developed a comprehensive assessment checklist. At a very top level, it consists of the following:
- Awareness & education
- Definition of trade secret in use
- Qualification
- Classification of trade secrets
- Ownership of trade secret policy and procedures
- Trade secret asset management process
- Access & access controls
- Protection mechanisms
- Sharing trade secrets with 3rd parties
- Entrusted with trade secrets belonging to 3rd parties
- Valuation of trade secrets
- Trade secret asset management system
- Other metadata associated with trade secrets
- Audits / audit trails
- Governance
Much more details sit behind each of the items listed above.
Steps or Phases in a Trade Secret Assessment
The IP Firm typically follows a six-step process when conducting such an audit or assessment. They recognise that there is not one size fits all, so they are flexible and can adjust to suit the specific needs of the client.
- Scoping of the audit / assessment
- Request for information
- Open meeting(s)
- Field work
- Drafting the report (findings & recommendations)
- Closed meeting
Hazel Helps Companies Identify Rank & Protect Their Trade Secrets
The IP firm in this study has employed the Hazel Trade Secret Asset Management System to manage its clients’ trade secrets and trade secret processes. Hazel can keep track of corporate trade secrets and help determine an appropriate level of protection for each trade secret recorded. Hazel can record who in an organization is responsible for a given trade secret, who is responsible for protecting the trade secret, and who has access to the trade secret, among other things. Contact the Hazel Team today to learn more.
For Secrets, I’m Donal O’Connell.
Credits:
Service offering by Internet Archive Book Images – https://www.flickr.com/photos/internetarchivebookimages/14598031528/Source book page: https://archive.org/stream/architectenginee11333sanf/architectenginee11333sanf#page/n356/mode/1up, No restrictions, Link
Assessment, by U.S. Federal Government (Transportation Security Administration) – http://www.tsa.gov/press/happenings/boston_bdo_spot.shtm, Public Domain, Link
Examination by Henri de Toulouse-Lautrec, Public Domain, Link
Tom Ewing
Thomas Ewing is a commercial lawyer, registered patent attorney, and intellectual property counselor with more than 25 years of experience in the IP field. In his consulting practice, Tom routinely advises international organizations, government agencies, universities, law firms, multinational corporations and financial institutions. Tom has been recognized as one of the world’s 250 best IP strategists by IAM Magazine in every edition of its IAM 250 since the list’s inception in 2009.
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