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risk
by leon on June 8, 2006

The reality is that the losses would probably be a lot higher. As a rule, companies are reluctant to come out and admit they've been done and lost money. No-one likes to look stupid, particularly when you're reporting to shareholders and regulators.
The trade secret trade is also fertile ground for costly litigation. In the last few weeks, we have seen Internet security outfit Symantec suing Microsoft, claiming the world's biggest software maker misappropriated trade secrets to develop its own competing features and products, including the next version of Windows, and Apple struggling to crack down on trade secret leaks.
Drawing from his research into two unnamed US high tech companies, including one with a 70,000-plus workforce, Hannah argues that the biggest threat to a company's trade secrets comes not from spying competitors but from within: current and former employees. In his paper Keeping Trade Secrets Secret, he says companies can be ham-fisted when it comes to protecting intellectual property.
Instead of requiring employees to sign legally binding non-disclosure agreements straight away, he says it would be more productive to give employees time to settle in. Instead of talking about trade secrets only when the employee joins, they should make it an ongoing process. Clarifying who exactly owns the ideas the employees generate, and not making them feel they are not trusted would also help.
Just how to do this is unclear. Hannah just offers broad directions. Common sense really which makes you wonder how some smart companies can be so stupid.
But what's really needed are systems that ensure everyone is absolutely clear. And that includes management and directors. It disillusions everyone when you're working for an organisation and you end up learning all about your company's trade secrets in the media.
Permalink: Trade secrets: the threat within
Trackback: http://publish.creative-weblogging.com/publish/mt-tb.pl/23878
Mr Wong
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Companies continue to make big losses when their trade secrets are stolen. A 2002 survey found that 40% of firms reported actual or suspected losses of secrets. But there are common sense steps companies can take to protect themselves.
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