Uncle Sam Wants You To Mitigate The Theft of U.S. Trade Secrets

On February 20, 2013, the White House published an “Administration Strategy on Mitigating the Theft of U.S. Trade Secrets.” While the Strategy takes a macroeconomic view of, and approach to, the problems of trade secret theft, readers of this blog should consider the possibility that they may have practical experience in the future with one of the Strategy’s particular action items: promoting voluntary best practices by private industry to protect trade secrets.

In the Strategy, while couching its recommendations in the context of protecting the innovation that drives the American economy and supports jobs in the United States, the Obama Administration undertakes to pursue five action items: (1) focus diplomatic efforts to protect trade secrets overseas, (2) promote voluntary best practices by private industry, (3) enhance domestic law enforcement operations, (4) improve domestic legislation, and (5) public awareness and stakeholder outreach.

The second of these action items encourages and promises Administration support for efforts by companies and industry associations to “examine internal operations and policies to determine if current approaches are mitigating the risks and factors associated with trade secret misappropriation committed by corporate and state sponsors.” It also proposes areas that private industries could consider for voluntary best practices, including:

• research and development compartmentalization,
• information security policies,
• physical security policies, and
• human resources policies.

The Strategy notes that the development and adoption of voluntary best practices should be consistent with anti-trust laws, and would be intended only to offer suggestions to assist businesses in safeguarding information, not to establish some sort of minimum standard of protection.

While companies of course will set their own policies and practices with regard to trade secret protection, there may be benefits to participating, for example, in an association’s effort to develop an industry’s best practices. Companies should be on the lookout for such initiatives and consider whether it makes business sense to participate.