Intangible assets (namely, trade secrets) often can be more easily understood when analogized to tangible assets (for example, works of art) with which people are familiar.
To that end, the theme of Ocean Tomo’s 2013 Trade Secret Management & Monetization Symposium was “Trade Secrets: Valuable, but Vulnerable, IP Assets.” That same general theme — valuable, but vulnerable (VBV) — applies equally to certain works of art. In fact, a recent Wall Street Journal article, portions of which are discussed below, effectively made that point. (Daniel Grant, “Picture Your Art. Now Picture It Stolen.” 11/11/13 WSJ, R7.)
The analogy between works of art and trade secrets actually can be extended. And, that analogy can provide trade secret owners with the perspective needed to effectively protect their uniquely valuable assets.
Beyond the general VBV parallelism, six aspects of the trade secret/art analogy deserve mention:
- The usual suspects. When private art is stolen, relatives are often primary suspects. Likewise, insiders (i.e., employees, consultants and business partners who are authorized to access a trade secret) are responsible for most trade secret misappropriation.
Take-away: Limit the number of persons authorized to access your trade secrets. Fewer authorized persons should translate to a lower risk of insider theft. (This take-away tracks the same point made in a 10/30/13 post regarding analogies between movie scripts and trade secrets.)
- Safe and secure. A robust security system that monitors and protects the facility in which art is displayed or the facility and equipment (e.g., server or hard drive) in or on which trade secrets are used or stored is essentially a must. Further, any such system should account for all points of entry and exit.
Take-away: Beyond a security system and appropriate, related measures (e.g., security personnel, security gate (i.e., entrance/exit) that is locked at appropriate times, visitor sign-in procedure, video surveillance, motion detectors, locked/restricted areas or some combination of those measures), a trade secret owner should (a) obtain the names and company affiliations of any facility guests, (b) account for anyone who enters and exits its facility and (c) keep unauthorized persons out of its facility. (This take-away dovetails with points made in the 10/30/13 post.
- Out of sight, but not out of mind. Works of art may be stored off-site because of limited space, and trade secrets may be stored off-site as part of an overall risk mitigation strategy. Secure, off-site storage of a trade secret should protect against a catastrophic loss of the trade secret. (This take-away dovetails with a point made in the 10/30/13 post.)
Take-away: Where a trade secret owner utilizes an off-site storage facility, the owner should verify that the protective measures at that facility are commensurate with the protective measures at the owner’s facility.
- Tag, you’re it. “DNA threads,” which are difficult to visually detect, can help to prove ownership of stolen works of art. Those threads contain electronically stored identifiers (e.g., the name of the owner and the work’s ownership history) and, for example, can be woven into the back of a painting’s canvas. Likewise, a trade secret can be inconspicuously tagged with an identifier that helps to prove trade secret ownership and misappropriation. For example, an intentional typographical error in a trade secret can serve as a “fingerprint,” i.e., as evidence that an alleged thief wrongfully copied (misappropriated) the trade secret.
Take-away: Inconspicuously tagging a trade secret is not a substitute for conspicuously marking the trade secret as “confidential.”
- Smile for the camera. Photographs of works of art can help to prove ownership and facilitate recovery. In other words, photographs memorialize unique aspects of — even imperfections in — works of art. Without those unique “fingerprints,” successfully identifying and recovering stolen works may be more difficult. In some cases, photographing a trade secret may be advisable. For example, if a company has only a single prototype or embodiment of a trade secret, then creating a tangible and complete record (e.g., photographs) of the prototype or embodiment may be prudent. Of course, any such photographs should be securely maintained.
Take-away: Overall, photographing works of art is like inventorying trade secrets. Inventorying trade secrets, i.e., knowing what your trade secrets are, is important for multiple reasons. For example, a trade secret inventory can lead to (a) more effective protective measures for the trade secrets and (b) more proactive leveraging of the trade secrets.
- Keep your receipts. Acquisition- or purchase-related documents, such as receipts, should be securely maintained because they can help to establish ownership of a work of art. Likewise, securely maintaining the R&D, engineering and other documents that reflect the development of a trade secret can help to establish ownership and the value of the trade secret.
Take-away: Trade secret source documents (e.g., R&D, engineering and other documents that reflect the development of the trade secret) typically should be treated with the same degree of care (i.e., level of confidentiality) as the actual trade secret.