The trade in trade secrets continues unabated. According to David Hannah, assistant professor of management and organisation studies at simon Fraser University in Canada, a 2002 survey of more than 130 companies found that nearly half reported actual or suspected losses of trade secrets.
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.
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