How to Actually Keep a Trade Secret

by Archer Tope

I can’t tell you it is a secret – well ok…


brain-and-chainsTrade secrets have a number of fundamental flaws. Probably the most difficult thing about keeping a trade secret is your company has to be able to keep a secret. While the concept of keeping a secret is easy, the implementation can be extremely difficult. With algorithm or process based secrets, it may be possible to limit access to a small number of employees, contractors, or advisors. This helps to maintain the secrecy. Business methods and ideas incorporated into commercial products tend to be the hardest secrets to keep.

Keeping a Trade Secret

Note – This article is not intended to discuss the legal or ethical treatment of trade secrets. It deals with the practical way a set of employees tend to view this type of information. While this view of trade secrets may violate agreements or laws, it is a thought process that is often shared by a subset of former employees and should be dealt with accordingly.

Often companies view trade secrets as a collection of know-how spread among their teams. A problem with this amorphous view of a trade secret is team members come and go from both the team and the company. If a trade secret is treated in this manner, it can be hard to define exactly what is secret and may leave employees confused about exactly what is a secret and what is not.

If everything is important nothing is important.

The tendency of many organizations is to over-define what information is a trade secret. This tendency can gradually erase the line between a company secret and general knowledge in an employee’s mind. Without clear lines between secrets and general knowledge, former employees generally rely on their best judgment to discern what to share with their new employer. Unfortunately, this way of thinking can be a very slippery slope and is likely to be continually redefined in the employee’s mind until almost everything is fair game to be shared.

This may not be intentional on the employee’s part. Many employees believe they just know what theyquestion know. The collection of knowledge they have accumulated throughout their career is what makes them valuable in the marketplace. Many times they do not segment knowledge into categories, such as company secrets and general knowledge. Also, even if an employee knows something is a company secret, they may be able to ask the right questions to help others in their new company develop the invention on their own.

Protecting Trade Secrets

trade-secret-pngMany times problems associated with trade secrets are created or made worse by the lax manner in which trade secrets are treated within a company. While most companies have employee agreements in place which requires the employees to maintain confidential information, they don’t take the next step and clearly, specifically, and without a doubt describe the trade secret to be covered by the agreement. They don’t draw a box around the trade secret and tell everyone “we own this!” Many companies position trade secrets as everything they do, don’t do, may want to do, or could have thought about doing. Unfortunately this way of viewing trade secrets muddles the boundaries and importance of trade secrets in many employees’ minds.

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Use your company’s current innovation award programs to formalize what is considered a trade secret by your organization. Define a specific category for trade secrets and develop a corresponding reward system for developing and recording trade secrets. Usually, the reward does not have to be large or even significant in order to gain participation in the program. The award associated with recording and protecting a trade secret should be enough to incent participation without encouraging abuse of the system. The requirement for documentation should be specific and tangible while keeping the submission to a manageable length. You should include a signed statement which states the employee(s) acknowledges this is a trade secret and the secret is covered by the employee agreement.

This type of program has a number of benefits for the organization. It will provide the ability to reward and recognize key employees for developing and recording the trade secret. This system reminds the employees the concept is a trade secret and covered by confidentiality agreements. It tends to keep employees from freely discussing the concept with those who do not have a need to know; e.g., outside contractors, vendors, customers, etc. And, most importantly, since the organization is taking this trade secret seriously, the employees are much more likely to do the same.

This detailed recording of trade secrets also may help to demonstrate an employee has willfully violated an employee agreement. The documents should be maintained and protected in a formal manner.

Remember if you treat trade secrets seriously, others are likely to follow your example.

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About the Author

My name is Archer Tope – this is a pseudonym or Nom de Plume if you prefer. The reason for the use of this subterfuge is to protect my true identity while I continue to work in the innovation and intellectual property field. I have been involved in or around innovation for at least 20 years. I decided to write this book because I found some individuals and entities tend to view innovation as more of a hobby instead of a true vocation. This has always bothered me because there is a method to implement an effective innovation program – and it works.

I have over 70 domestic US and international patents to my name. Many of my patents have been sold or used to develop products and companies which were sold to others. I have been involved with startups which have had public exits, got caught in stock market crashes, acted as an expert witness in a patent litigation, sold patent portfolios, helped structure new innovation programs, negotiated innumerable contracts, run development teams, and sued a Fortune 50 company for patent infringement. My view of the innovation landscape may be broad, however, I have also dealt in the details.

About Archer Tope

My name is Archer Tope – this is a pseudonym or Nom de Plume if you prefer. The reason for the use of this subterfuge is to protect my true identity while I continue to work in the innovation and intellectual property field. The tips and tricks I typically write about can make existing clients nervous or they could be used against me in negotiations. My intellectual property lawyer has often told me “God help my adversary who wrote a book.” In an effort not to find myself on the receiving end of a cross examination about this book from a client or others, I have used this pseudonym. Please forgive me for not revealing my true identity. I have been involved in or around innovation for at least 20 years. I often consult with companies from startups to Fortune 20 corporations. While explaining how to view intellectual property, set up an innovation group, or manage a development team, I have encountered just about every intellectual property dilemma imaginable. I decided to record some of my experiences because I have found some individuals and entities tend to view innovation as more of a hobby instead of a true vocation. This has always bothered me because there is a method to implement an effective innovation program - and it works. My goal is to outline tools and techniques you can use to keep innovation flowing, manage an intellectual property program, negotiate contracts, or optimize your patent program. Also, I have tried to show what works in large corporations, as well as small or start-up companies. If you treat innovation as a vocation instead of a hobby, you will likely be amazed at the results. I am somewhat unique in the innovation management field as my background includes areas ranging from corporate development, management of high tech development labs, inventor of record, founder in startups, and executive management. I have worked in large companies with innovation budgets in the tens of millions, as well as startups who had to bootstrap their way. I have been fortunate to get a real view of innovation from multiple different perspectives. I have over 70 domestic US and international patents to my name. Many of my patents have been sold or used to develop products and companies which were sold to others. One of my first inventions I developed and rolled out was worth an estimated $100M. I was lucky because, at the time, I was working for a Fortune 100 company and received all of $3,000 for my efforts. This gave me the push I needed to leave the perceived comfort and safety of the corporate innovation world – I have never looked back. I have been involved with startups which have had public exits, got caught in stock market crashes, acted as an expert witness in a patent litigation, sold patent portfolios, helped structure new innovation programs, negotiated innumerable contracts, run development teams, and sued a Fortune 50 company for patent infringement. My view of the innovation landscape may be broad, however, I have also dealt in the details. Others have said my approach to intellectual property is definitely unique and worth passing on. I hope you agree. I can assure you that many of the ideas presented are novel and, if used correctly, can work.

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