November 27, 2021

Volume XI, Number 331

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November 24, 2021

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Danger on the Horizon: Detecting Early Signs of Trade Secret Theft by Competitors

Trade secrets are typically associated with a company’s most profitable products and services, and maintaining control of critical confidential information is often essential to a company’s revenue stream and continued success. Along with restricting access to secrets on a need-to-know basis and tracking who is accessing them and how, companies should regularly assess whether competitors have acquired the recipe for their “secret sauce.”

At the top level, keep an eye on the products and services your rivals are rolling out and the timing of their launches. If a competing business is able to introduce a complex product very similar to yours faster than would seem feasible, they may have learned one or more of your trade secrets. Pay particular attention to situations where an employee of the competing company had a close interaction with one of your employees, or where one of your former employees now works for the competitor. In those cases, it would be advisable to closely examine the components of the competing product to figure out what confidential information the competitor could have accessed.

To help establish proof of trade secret theft, software companies can include a line of code that serves no purpose yet would show up if the software were copied. Similarly, manufacturers can add a part that isn’t necessary to the functioning of a product but would be included in any products made with stolen machining diagrams.

By continually reviewing the market for copycat items and planting a “tell” into products, companies can quickly detect trade secret breaches and arm themselves with the data they need to confront unethical rivals, and, if necessary, take them to court.

The next installment in our ongoing series on trade secrets will cover how to prevent former employees from using your company’s trade secrets at a new job or their own business.

©1994-2021 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 233
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About this Author

Adam Samansky IP Attorney Mintz Law Firm
Member

Adam is an experienced IP litigator who primarily serves pharmaceutical, medical, high tech, and defense industry clients. He handles patent, trademark, and trade secret matters for innovators and investors. Adam has a strong record of success in multiparty, highly contested Hatch-Waxman litigation, in addition to other litigations involving advanced biochemistry, polymers, optics, manufacturing processes, and electronics. He has tried cases before multiple US district courts, briefed and argued cases before the US Court of Appeals for the Federal Circuit, and briefed bet-the-company...

617-348-1819
Nicholas W. Armington, mintz levin law firm, patent, IP, litigation attorney
Associate

Nicholas is a litigator with experience representing clients in United States District Courts and the International Trade Commission, among other venues. Nicholas’ practice focuses on patent and trade secret litigation and he has litigated cases in a variety of technology areas, including network devices, semiconductors, converged devices, LED lighting, and manufacturing devices.

In 2018-2019, Nicholas served as a Special Assistant District Attorney in the Middlesex County District Attorney’s Office prosecuting criminal cases in the Framingham and Natick District...

1.617.348.4451
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