Demonstrating ‘reasonable efforts’ to protect digital trade secrets

On Behalf of | Sep 8, 2020 | Trade Secret Protection |

A business cannot simply claim a piece of information is a trade secret and expect it to receive applicable legal protections. Instead, the owner of this intellectual property must take steps to meet certain criteria. That includes making “reasonable efforts” to ensure the trade secret remains a secret.

Before widespread adoption of the web, the accepted definition of “reasonable efforts” was relatively clear. Strongly written employee contracts, physical barriers and clear employee or contractor procedures often helped demonstrate a business’ commitment to maintaining secrecy.  The increasing reliance on digital communications and remote access, however, opened up a new front.

Why this is so important now

A court, in accepting a trade secret designation, must be convinced reasonable efforts were taken to protect the IP in question. The longstanding real-life measures remain vital and cannot be neglected. However, on their own, these security steps are no longer sufficient, as protecting trade secrets now requires a two-front defensive approach.

Sure, you can bolt the front door, set up a motion-sensing security camera and hire a private patrol to monitor the yard. But if the back door remains unwatched and unlatched, your front yard efforts do little good.

Cybersecurity is the back door.

Strategies that may demonstrate reasonable efforts

Sufficient cybersecurity measures are, in theory, digital implementations of real-life protective steps an IP owner should take. Broadly speaking, these 21st century solutions can be lumped into a few categories:

  • Identity and access management: Policies (such as multifactor authentication) that limit access only to those who need it
  • Data security: A prohibition on the use of hardware or software that could serve as an attack vector
  • Network defense systems: Effective, ongoing use of tools such as a firewall and data encryption
  • Activity tracking: The ability to monitor a user’s activities, including which files they accessed, when, and from where

Just like in real life, plugging one hole is often not enough. In order to ensure your trade secret earns its presumed legal protections, you must take a comprehensive approach. In the event of an IP dispute or related litigation, this can help prove to the court you understood the value of this proprietary information and took its secretive nature seriously.

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