Threats to the trade secrets of businesses today are more than ever, from organized crime and "hacktivists" to competitors and red employees. A recent Center for Responsible Enterprise and Trade and PricewaterhouseCoopers LLP (PwC) report—Economic impact of Secret Trading Theft: A framework for companies to safeguard trade confidences and mitigate potential threat—describes the significant threats that businesses face and the source and substantial economic impact of theft of trade secrets. Indeed, trade secrets theft is estimated to have an economic impact of one to three percent of the United States' gross domestic product and other advanced industrial economies, as noted in the report. Such a percentage amounts to theft of trade secrets for hundreds of billions of dollars a year.
Theft of commercial secrets is a civilian infringement, and a criminal act is also punishable by serious fines and imprisonment. In a growing age of technology where the crown jewels of a company can be downloaded to a thumb drive, it is important that victims and violators are aware of the growing role that law enforcement plays in this area. It is crucial to work with experienced lawyers to interface with law enforcement, while maintaining control over civil disputes.
The U.S. prosecutors filed criminal charges against Huawei Technologies, China's largest technology company, that it has stolen trade secrets from its U.S. rival T-Mobile USA. Huawei has been the target of a broad-based U.S. crackdown, with allegations that the Communist Party has sold telecommunications equipment that can be used for spying by China. A Washington State 10-count prosecution accused T-Mobile of robbing trade secrets from employees who were able to receive the technology from competitors.
With the introduction of the Defend Trade Secrets Act, intellectual capital owners have a new tool for protecting their assets with the potential to defend them. In order to maximize protection, it is essential to review and update agreements with the latest suggested and required language through year-to-year assessments of local and federal laws with one's counsel.
It is important to be protected by implementing tools before the theft of trade secrets occurs. This will include reviewing the employment agreements in order to ensure that they are updated and signed in accordance with the DTSA (Defend Trade Secrets Act). In addition, the protection of proprietary information should be protected by agreements with third parties. Finally, enterprises need to secure the network and infrastructure through a need-to-know distribution of material: not allowing access to all employees.