Since the COVID-19 pandemic, remote and hybrid work models have become commonplace throughout various industries. While this shift has led to advantages in flexibility and productivity, it has also created new challenges for businesses seeking to protect their valuable trade secrets and confidential information. Accordingly, it is important to take proper steps to identify and protect your business’ trade secrets in order to prevent misappropriation and resulting litigation.
In order to protect one’s trade secrets, it is important to first identify what types of information qualify as a trade secret. Under both federal and Ohio trade secret law, a trade secret is information that: (1) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Some common examples of trade secrets may include customer lists, business strategies, and pricing formulas.
Businesses that have transitioned to a remote or hybrid environment must take extra precautions in protecting their trade secrets, as such environments have multiplied the risks involved.
Ways in which those risks have increased include: (1) employees may be using unsecured personal devices that do not maintain proper security measures; (2) companies are employing collaborative platforms, such as cloud storage or messaging apps, that can make it easier for bad actors or disgruntled employees to steal data; (3) with a higher rate of employee turnover, the risk of such employees taking confidential information with them is heightened; and (4) depending upon the nature of the businesses, remote work can make it more difficult to distinguish between personal and professional use of data.
As a result of these risks, there appears to be an uptick in lawsuits involving trade secret disputes. In such cases, it is common to see fact patterns that include: (1) departing employees downloading confidential information before resigning; (2) misuse of confidential documents via personal accounts; and (3) companies alleging that competitors encouraged new hires to steal proprietary information from their former employers.
In such cases, the resulting damages can be significant, including monetary damages, injunctive relief, and, in extreme cases, punitive damages and attorney fees.
With these risks and litigation trends in mind, it is crucial to take appropriate measures to protect trade secrets. Those steps may include:
While protecting your trade secrets is important, it is equally important to have a plan in place should those trade secrets be misappropriated. In such a scenario, time is often of the essence as once a trade secret is disseminated, it is difficult to claw back.
For these reasons, it is strongly advisable to build an ongoing relationship with a trade secret attorney who understands your business, the trade secrets you maintain, the risks involved, and the security measures utilized. This way, in the event of a breach, quick action can be taken.
Additionally, from a proactive perspective, an attorney can also assist with reviewing and updating both company policies and procedures and employee confidentiality agreements to ensure maximum protection of your trade secrets.
If you are the owner of a business who maintains valuable trade secrets, call Plakas Mannos today at 330-455-6112 to see how our team of corporate trade secret attorneys can assist you in protecting your trade secrets and growing your business.