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Open secrets? Guarding value in the intangible economy

Some leaks can’t be fixed

Confidential information is like an ice cube... give it to the party who has no refrigerator or will not agree to keep it in one, and by the time of the trial you have just a pool of water.” This, from the so-called Spycatcher case (1987), applies well to corporate assets: fail to store them correctly and all you might have left is an expensive mess.

The consequences of even a minor exposure of a trade secret can be huge. As this report reveals, the protection of trade secrets is rightly recognised by most senior executives as a priority issue. But the research also reveals gaps that leave companies unnecessarily exposed to risks. The top named threats – cybersecurity attacks and employee leaks – resonate with what we see impacting our clients. Increased home and remote working is straining security measures and employee loyalty. Added to this, an ‘innovate or die’ attitude in highly-competitive sectors can motivate new joiners to arrive with questionable material from their previous employer, or worse: outright theft between competitors. But while it is easy to focus on the lurking threats from weakened cyber security and disgruntled employees – and they are important – there are more routine actions a company can take to safeguard its secrets than just updating its IT systems or the employee handbook. Commonly, those who most need our help already have a trade secrets policy but have not properly implemented it in relation to the secret in question. Or the policy has not been updated to reflect the intangible assets the business now owns. Or protection was taken for granted.

With trade secrets – which for many businesses are strategically more important than a public patent portfolio – it is always costlier and messier to find solutions after a theft or a leak. Identifying the trade secrets and the threats posed to them, combined with rigorous internal processes and well-drafted contracts, can help prevent such problems from happening. Harder, but just as necessary, is engaging hearts and minds in corporate culture, to know why trade secrets are important, why we are all are responsible for protecting them, and what may happen if we do not (to both the company and the individual). In our experience, the businesses with the strongest defences have not only thought strategically about their intangible assets and how best to protect them but are also prepared for the worst. The trick to avoiding an asset becoming a crisis is to be wise before the event.

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Open secrets? Guarding value in the intangible economy
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Key contacts

Hans Scholten
Hans Scholten
International Business Development Manager
Amsterdam
T +31 30 2121 209
Tanja BalšićTanja Balšić
Tanja Balšić
Senior International Business Development Manager
Vienna
T +381 11 3208900
Wiktoria Segall
Wiktoria Segall
International Business Development Manager
Warsaw
T +48 22 520 5683

Contributors

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Tom Scourfield
Tom Scourfield
Partner
Co-Head of the international IP Group and UK Chair of the Consumer Products Sector Group
London
Aukje HaanAukje Haan
Aukje Haan
Partner
Head ESG | Co-Head of the CMS Commercial Group
Amsterdam
Dirk Loycke
Dirk Loycke
Partner
Rechtsanwalt | Co-Head of the CMS Commercial Group
Stuttgart
Carsten Menebröcker
Dr. Carsten Menebröcker, LL.M. (NYU)
Partner
Rechtsanwalt | Co-Head of the CMS Intellectual Property Group
Cologne
Hannah Netherton
Hannah Netherton
Partner
London
Joel Vertes
Joel Vertes
Partner
London
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