How Can I Protect Myself and Become Aware of Trade Secret Theft?

Trade secrets are intellectual property that can give you a competitive edge in your market. It is important to protect yourself from increasing trade secret thefts.

How Can I Protect Myself From Trade Secret Theft?

A retired DuPont employee was charged this past April with stealing trade secrets about its flexographic printing plate technology. In the months leading up to his retirement in 2016 Anchi Hou was accused of allegedly downloading more than 20,000 files related to the technology. If Hou is convicted, he could face ten years in prison and a fine of $250,000. These cases are commonly known as trade secret theft cases.

What is a trade secret?

A trade secret is a formula, process, design, practice, an instrument, a commercial method, an uncommon compilation of information which is not generally known; and which can give you a competitive edge amongst your peers in the market. They are the essential ingredient in your product or service that set you apart and also play an important role in the corporate strategy of your company.

Trade secrets could be recipes, computer algorithms, supplier lists, manufacturing techniques, strategies in financial and marketing sector and pricing information. All of these could give your competitor an edge if they can make the same product with an improved design.

The problem with trade secrets is that unlike other intellectual properties, trade secrets do not require any sort of filing with the federal agencies. For this very reason, many companies opt to keep their trade secret as an intellectual property secret. Corporate leaders need to realize the magnitude of responsibility in keeping trade secrets for the very reason that it is vulnerable information.

Importance of trade secrets

A survey on the importance of trade secrets revealed that computers and electronics are the biggest threats when it comes to preserving trade secrets. This is generally the most vulnerable source from which information can be hacked and passed on to competitors.

Many companies do not even report that they have had a trade secret theft for fear of tarnishing their reputation. Therefore, it is all the more difficult to pinpoint the exact number of trade secrets thefts that occur around the globe. Statistics say that trade secret thefts are 1-3% of the United States GDP which is roughly equivalent to US$200 billion to $550 billion a year.

What is known, though, is that the number of cases reported has multiplied 3x since the year 2005. Most of these reported cases are in the Information, Communication and Technology and various miscellaneous sector. Survey says that the theft is on the rise and at a rapid pace.


Many CEOs of companies are actually unaware of the fact that their valuable information or trade secret has been stolen. This makes it all the more important for a business to contact a trade secret litigation attorney to review your case, in case you suspect a trade secret theft. To create awareness here’s what you need to review first:

  • Check if your trade secret has a patent or if it is eligible for one. Weigh the advantages and disadvantages of having a patent. A trade secret lawyer will be able to guide you better and answer any queries that you might have.
  • Limit the number of people who know about your patent (if you have one).
  • Confidentiality agreements with your employees will also help protect your secrets. It’s also a good idea to sign confidentiality agreements with your business partners too.

Where does trade secret theft originate from?

There are a number of sources where trade secret thefts can originate from.

  • Former employees account for almost 32% of reported trade secret thefts. Jilted employees, an employee who had a bad disagreement before he/she left and wanted revenge, or employees who are in financial distress have all the more reason to share trade secrets with a rival company.
  • 28% of thefts happen from suppliers, third-party traders or suppliers. Most of these thefts are motivated due to lack of proper financial coverage.
  • Current employees make up 20% of the reported thefts. Employees may want to take revenge because of a lost promotion or raise, or because they think sharing a trade secret will put them in a better position with the rival company.
  • 12% thefts are done by cyber criminals and hackers. Most hackers do it just for the thrill while others do it because they are paid heavily by rival companies.
  • The rest of the 8% comprises of state-sponsored cyber criminals or hackers.

In any case, if you are a business that has trade secrets, it better to safeguard them. And in the event you suspect there has been a theft, you should waste no time in approaching a trade secret attorney to know what to do next.

Contact a Trade Secret Attorney Today

Contacting an experienced trade secret attorney can ensure that your intellectual property is protected from thefts. Contact the offices of Paul & Paul at 866-975-7231 for a consultation today.


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