How Can Businesses Protect Against Espionage

| General

How Can Businesses Protect Against Espionage?

In this commercial world, businesses face many internal and external challenges from espionage.

Internal and External Risks

These risks can present themselves and can emerge from a broad range of quarters. These include but are not limited to former colleagues who have exited the business and are a risk to keep an eye on and businesses should be advised to do all they can reasonably can to protect their respective business interests by ensuring that measures are taken to stop communications containing said confidential information before the relevant person’s exit from the organization. The implementation of these should be time-bound and designed primarily to take effect from the moment the particular colleague exits the business.

How Can This Risk Be Managed?

Most people are familiar with the words, ‘audit’, risk register and impact assessment. Some welcome the words, whereas for some just the sound of them are enough to fill them with dread. However, in instances such as this lawyers should be advising their clients of the benefits an implemented process may have to protect the business. In this regard the firm should carefully set out what information of a sensitive and confidential nature it has possession of and then forthwith assess whether the exiting employee had access to this during his engagement with the particular organization. They should then see whether the person still has access post-employment.

Another way for a business to effectively mitigate against the risk of this kind of harm is to ensure exiting colleague signs a form containing a declaration confirming that they do not hold and have not processed any confidential business data.

Another angle for businesses to protect themselves from this real and pressing danger posed to their interests is to ensure they are regularly checking, testing, and assessing whether the internal processes would be up to the required standard in the event of this kind of high-risk incident. These should be designed to identify within a short space of time if a trade secret has been leaked into the perceptively wrong hands and then the business would find it much easier to enter damage limitation mode to prevent mitigating the risk of future leaks and their wider impact on the concerned business.

Businesses should not be lackadaisical in this regard. Wherever possible colleagues who are leaving the organization should be asked to sign this declaration and it would be in the business’s best interests for them to do so because if the matter turned litigious down the track it would provide extremely beneficial evidence in support of the business client’s case. If they decide to take this seemingly sensible course of action it would give the business client a significantly higher prospect of successfully persuading a court to hand down an injunction to prevent previous colleagues from giving away information that could be interpreted by the courts to be trade secrets.

Practical Ways To Protect Your Business’s Trade Secrets

Lawyers should be advising their commercial clients to continually ensure they are checking their legal position on trade secrets. Business clients should be working with their external and in-house legal teams to mitigate the risks of this taking place by ensuring their processes are compliant and consistent with the required:

  • regulatory
  • legal and
  • industry standards.

Lawyers should be advising their business clients about the implications if an espionage attempt succeeds could legally be very serious. If a client does not follow the above strategy, they could potentially find themselves having a hard time convincing a court that they are entitled to an award of damages or equitable remedy.

The Legists Content Team

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THE ARTICLE WAS WRITTEN USING THE FOLLOWING SOURCES

[1] Squire Paton Boggs – Overview of Ways to Legally and Practically Protect Your Company from Industrial Sabotage – National Law Review – 3 June 2022 - Legal And Practical Ways To Protect From Industrial Espionage (natlawreview.com)

[2] Glassman, Benjimin et al – Series: Types of Industrial Espionage – 10 May 2022 – Squire Paton Boggs - Series: Types of Industrial Espionage | The Anticorruption Blog

[3] Defend Trade Secrets Act of 2016

[4] Economic Espionage Act 1996

[5] Dairy, LLC v Milk Movement Inc (No. 21-cv-02233, 2022 U.S. Dist. LEXIS 34072 (E.D. Cal. Feb. 25, 2022)

[6] United States v Lange 312 F.3d 263, 265 (7th Cir. 2002)

[7] Economic Espionage Act 1832

[8] Uniform Trade Secrets Act (“UTSA”)

[9] N. Atl. Instruments, Inc. v. Haber, 188 F.3d 38, 44 (2d Cir. 1999)

[10] Trade Secret Protection Act (“TPSA”)

[11] Barr-Mullin, Inc. v. Browning 424 S.E.2d 226, 228 (N.C. Ct. App. 1993)

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