Trade Secret Asset Management (Case Study)

Secrets — Trade secret asset management has been neglected by many companies historically. However, this a vital area that can no longer be ignored.

Consider the following case study in trade secret asset management that involves an innovative company headquartered in Europe with operations in a dozen countries worldwide. The company employs nearly 3,000 people in all.

The company is considered a market leader in its particular sector.

The Legal & IP function of this company is relatively small with a total headcount of less than 10 people. Most of the legal team is located at the company’s European corporate headquarters with a few other staff members located in the USA. The company’s legal and IP work is heavily supported by a number of external Legal & IP Firms.

The Case Study

Case studies provide a means for highlighting and extracting practical principles and methods for shaping and accelerating progress in solving real world problems.

In very general terms, a case study is an account of an activity, event or problem that contains a real or hypothetical situation and includes the complexities one would encounter in the workplace.

The Triggers

During my first meeting with the company I asked specifically why they wished to improve their trade secret asset management process and why now.

A number of different issues surfaced during that discussion, such as:

• The company’s general counsel was aware of the developments with the Defend Trade Secrets Act in the USA.
• A few key employees had recently left the company and joined competitors and this had caused some disquiet.
• The company was embracing more collaborative or open forms of innovation, and this was leading to some concerns about the leakage of IP out of the organization.
• The IP strategy of the company had recently been reviewed by the Board, and as a result the GC was asked to update the IP strategy and specifically asked to ensure that trade secrets and trade secret management were properly considered.

So it was obvious that there were a number of different triggers.

Current State Analysis

Following a workshop to assess their current state, it was quickly clear to me that:

• The company was not properly managing its trade secrets with no clear ownership of the trade secret management process or the secrets themselves.
• Documentation about the trade secrets was poor.
• Access to and access control around its trade secrets was very ad hoc.
• Protection mechanisms deployed to safe guard its trade secrets was poor or non-existent.
• There was a lack of any classification of the trade secrets by the company.
• Details on whether trade secrets had already been shared with third parties was often missing.
• Information of any trade secrets belonging to third parties but entrusted to the company was scarce.
• There was no audit trail.

The Change Project

The company took a number of steps initially:

– The trade secret policy was updated.

– A top level trade secret process was defined.

– A trade secret asset management system was taken into use.

– A section on trade secrets was added to the existing basic IP training for all employees.

– A governance structure was defined.

An exercise was then conducted to attempt to gather information on the various trade secrets existing within the organization. A phased approach was adopted:

• identifying trade secrets by corporate functions starting initially in R&D and Operations
• identifying which trade secrets had been shared with any third party collaboration partners
• identifying any trade secrets belonging to others but entrusted to the company

A number of workshops were held between the legal department and other corporate functions to raise awareness of trade secrets within these other functions, and to discuss and agree their role and responsibilities when it comes to trade secret asset management.

For the first time, a report on the company’s trade secrets was presented by the GC to the Board. I believe that this was also presented to their Advisory Panel.

A Journey

The company in this particular case study only started on their trade secret asset management journey in early 2016, and they recognize that they still have a long way to travel.

Their stated goal is to:

• Install a confidentiality culture across the organization
• Ensure key corporate functions work together to manage these assets going forward
• Have comprehensive metadata available on their trade secrets

The Trade Secret Asset Management Process and System

The company now has a well defined trade secret asset management process in active use, underpinned with a robust fit for purpose system.

The company has a much more structured approach in place with their process at the very top level consisting of the following steps – context; identification; analysis; review; protection; and monitoring.

The company utilizes a dedicated trade secret asset management tool which serves as a central repository for the company’s trade secrets metadata and allows for that information to be properly “sliced and diced”. Its key function is to provide the company with significant information on their trade secrets, thus allowing the company to really understand the nature of their trade secrets:

• Name
• Type
• Classification
• Owner
• Date created
• Access
• Access control
• Shared (if applicable)
• Protection mechanisms
• Last review date
• Legal advisor
• Value
• Expiration date (if applicable)
• Etc.

The Benefits

Although very early days yet, the company believes that it has already greatly improved its trade secret asset management.

When I spoke to the company recently, they highlighted two issues in particular. Firstly, their new approach has improved Board satisfaction and secondly it has led to more constructive discussions about trade secrets between the Legal & IP function and others parts of the organization.

An update on this particular case study will be provided when the company has made further progress. My intention is to publish a follow up paper that showcases what the company has achieved at that point in time but also highlighting if any things did not go to plan and why.

Hazel Helps Companies Identify Rank & Protect Their Trade Secrets

The Hazel Trade Secret Asset Management System may help your company manage its trade secrets and trade secret processes. Hazel can keep track of your corporate trade secrets and help you determine an appropriate level of protection for each trade secret recorded. Hazel can record who in your 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:

Shepherd by Giuseppe Palizzi – http://www.dorotheum.com/, Public Domain, Link

Spilling, detail of Antoine Gustave Droz – http://www.donaldheald.com/ (direct link), Public Domain, Link

Before and after by Dietmar Becker – http://unsplash.com/post/63623840298/download-by-dietmar-beckerhttp://666a658c624a3c03a6b2-25cda059d975d2f318c03e90bcf17c40.r92.cf1.rackcdn.com/unsplash_5243e9ef164a5_1.JPG, CC0, Link