Securing Trade Secrets in the Digital Age

Trade secrets are increasingly critical to success in a competitive global economy, but legal protections for them remain weak in much of the world. This prompted the none-profit Center for Responsible Enterprise and Trade (CREATe.org), in partnership with PwC, to issue a report on the economic impact of trade secret theft.

As highlighted by a 2013 report by the Obama Administration, the theft of trade secrets is a growing geopolitical problem that threatens exports and jobs and undermines innovation.

Individual cases that have come to light offer a glimpse of how much damage trade secret theft can do. In April of 2011, for example, a former Ford Motor Company employee was sentenced to 70 months in federal prison for stealing trade secrets when he left to work for a competing automaker in China. He had made illicit copies onto external hard-drives of some 4,000 Ford documents. Those documents contained trade secrets that Ford valued at $50 million.

The CREATe-PwC report describes the magnitude of the problem, discusses the main perpetrators and analyzes how trade secret theft may affect business and regulation in the future. It also provides a practical framework for assessing a company’s trade secrets, including their vulnerability to theft, and it provides a systematic way of investing in safeguards to help avert catastrophic losses and the cost of legal action.

Companies and industries can also use the report as a way of entering the broader public discussion about trade secrets.