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What You Can Learn from the Wave of Trade Secret Cases That Followed the 2007-2008 Financial Crisis

The sharp upswing in trade secret litigation triggered by the global financial crisis of the late 2000s taught companies some hard lessons about trade secret theft and disputes. Although we’re already immersed in a new economic downturn due to the global coronavirus pandemic, companies can take a number of actions to defend their secrets.

Simple preemptive measures can help deter theft of secrets and minimize the possibility of an expensive court battle. After the financial system meltdown, according to data gathered by Bloomberg Law, there was more than an eightfold increase in state and federal trade secret litigation when those disputes made their way into the court system in the mid-2010s compared with case filings between 2007 and 2009.

Figuring out who has access to key secrets and monitoring how they’re using them is a solid start. Companies should watch for unusual activity, such as employees looking at or downloading files with secret information unrelated to their work. Technology safeguards include turning off USB connection ports that would enable employees to transfer data to other devices, blocking employees’ ability to upload information to file sharing websites, and in some cases, limiting access to personal email accounts at work.

Including confidentiality agreements in employment contracts is equally critical. If an employee leaves, voluntarily or otherwise, companies need written confirmation that the departing worker does not possess any confidential information and intends to comply with the terms of the agreement.

Taking these straightforward steps will help companies retain control of their critical business secrets in a period of employment upheavals likely to be followed by a new wave of trade secret cases.

 

©1994-2020 Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. All Rights Reserved.National Law Review, Volume X, Number 202
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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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