A 2014 report co-authored by PriceWaterhouseCoopers and the Center for Responsible Enterprise and Trade estimated that companies lost billions annually due to trade secret theft. A Michigan couple was sentenced to prison in 2013 for attempting to sell to Chinese competitors stolen General Motors hybrid vehicle technology valued at approximately $40 million.

Without question, companies face significant financial exposure from the misappropriation and infringement of the company’s intellectual property. While pursuing registration of copyrights, trademarks and patents is commonly viewed as proper protection of those intellectual property rights, validation and protection of trade secrets can come only through litigation. By that time, the “horse may be out of the barn,” and the damage to the company is done. When asked to determine the validity of a trade secret, courts will analyze a company’s policies and procedures for identifying, compartmentalizing and protecting trade secrets; sporadic or non-existent policies and procedures can result in court-sanctioned disclosure and use of the secret by competitors.

Companies must have internal controls, processes and procedures for identifying and protecting intangible assets, including trade secrets. This involves activities along a spectrum that includes employee education, technological safeguards, periodic audits to maintain a current catalogue of trade secrets, sound human resources policies and third-party agreements, as well as aggressive enforcement of property rights. But it starts with education of company decision-makers and the commitment by those leaders to create a culture that understands the importance of protecting valuable intangible assets like trade secrets.

This presentation will cover trade secrets under Tennessee law. It will address identifying such secrets and provide recommendations for best practices in protecting trade secrets. The presentation will also involve a review of how courts look at trade secret protections and the damages recoverable for trade secret misappropriation.

3 Lessons the Attendees Will Learn:

1. Yes, companies have trade secrets that need to be protected.

2. Yes, companies can and should take reasonable steps to protect trade secrets.

3. The profitability and value of a company depend on protecting trade secrets.

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