Sunday, May 14, 2006, 5/14/2006 11:16:00 AM

An Academic Confirms What We Suspected about Trade Secrets

From the New York Times "What's Offline" business column:

Professor David R. Hannah at Simon Fraser University in British Columbia, writes in The Sloan Management Review, that companies are particularly bad at protecting their trade secrets. A link to the Sloan Management Review, who will permit you to purchase the paper for $6.50, can be found here.

According to the professor, "research has shown that the biggest threat to a company's trade secrets does not come from spying competitors but from within: current and former employees." And, he concludes, employees frequently disclose information simply because they do not know they are supposed to keep it confidential, having been briefed on the subject only once, during orientation.

The professor suggests a gentle reminder of those leaving on good terms "of their ongoing legal responsibility to protect the organization's trade secrets."

"For employees who are fired, laid off, or otherwise leave on acrimonious terms, the firm might consider pre-emptive measures" like sending both the employee - and his future employer - a letter reminding them of the consequences of disclosing, or acting on, trade secrets.

We'd go a step further and remind employees on a regular periodic basis -- once a quarter at least -- of their obligations regarding company trade secrets and also remind them of just what the company considers its trade secrets to be. That way there can be no mistake.

We'll see if we can run down the professor and get some more thoughts from him.


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