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New Jersey Companies Must Develop Procedures to Mitigate The Threat of Trade Secrets Misappropriation

briefcase.jpgIt isn’t every day that the activity of your business catches the attention of the White House. In February 2013, the Executive Office issued its Administration Strategy on Mitigating the Theft of U.S. Trade Secrets, the result of the collaboration of different departments to develop a strategy to protect the innovation that drives the American economy. Trade secret theft is bad for businesses, and it is bad for the United States, with results that could be detrimental to our economy and American jobs. Efforts to steal American trade secrets are on the rise, but your corporation can act to protect itself.

The Administration proposed voluntary “best practices” for private industry to implement to protect its trade secrets, which are geared toward identifying the threat to targeted technologies and examining corporate procedures in light of the threat and potential impact. Businesses are responsible for making sure they have information and reporting systems and for monitoring those systems to avoid illegal conduct by the businesses employees as well as to protect against outside threats. The following are some of the steps to take in developing company procedures:

  • Determine the specific information to be regarded as a trade secret.
  • Take reasonable measures to protect the secrecy of the information.
  • Identify potential risks and threats to identified trade secrets.
  • Take additional measures to protect trade secret information where appropriate.
  • Examine internal operations and policies to determine whether current approaches are mitigating the risks and factors associated with trade secret misappropriation, considering the following areas:
  • research and development compartmentalization
  • information security policies,
  • physical security policies, and
  • human resource policies.
  • Periodically reevaluate procedures to determine the adequacy of mitigating threats to the trade secrets.

  • The Office of the National Counterintelligence Executive has been identifying areas where U.S. businesses have been more vulnerable to trade secret misappropriation, and they include the use of portable devices; storage of information; globalization of economic activities; and the digitization of business records, research results, and other sensitive economic or technology­-related information. You can find business and consumer tools for protecting your innovations at
    The Administration promises “to apply sustained and coordinated diplomatic pressure on other countries to discourage trade secret theft.” The government is doing its part; New Jersey businesses need to do theirs.

    At McLaughlin & Nardi, LLC, our experienced attorneys can help with all phases of business planning. Our lawyers also help businesses and employers negotiate and draft restrictive covenants concerning the use and disclosure of trade secrets . Call us if you have been a victim of the theft of trade secrets, criminal and civil remedies are available. For help with business litigation or trade secret matters, please contact us by e-mail or at (973) 890-0004 to speak with one of our business attorneys.

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