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Don't Just Buy a Trade Secret System – Design Your System First!

Published on 15 Sep 2023 | 3 minute read
Don't buy a trade secret system without first defining what trade secrets are and who owns them in your organization.

In today's rapidly evolving business landscape, intellectual property, particularly trade secrets, plays a pivotal role in maintaining a competitive edge. Many organizations are now looking to data applications that promise to identify and protect their trade secrets. However, purchasing such a system without first addressing the fundamental need to define, align, and coordinate trade secret management across the entire organization is a naive approach that can lead to inefficiencies and missed opportunities.


The Importance of Trade Secrets:

Trade secrets are critical assets for any business, encompassing everything from research and development (R&D) processes to production, sales, marketing, and supporting functions like IT, Finance, and Legal. They are valuable because they provide a competitive advantage, but their true potential can only be harnessed when a company has a comprehensive strategy in place.


The Pitfall of Leaving It to the IP Functions:

A common mistake many organizations make is to delegate the responsibility of trade secret management solely to the intellectual property (IP) functions, typically the legal department. While these professionals are experts in IP law, they may lack the holistic understanding of the organization's processes, functions, and the intricate details of how trade secrets are generated and utilized across departments.


The Consequences of This Approach:

  1. Lack of Understanding: When the responsibility solely rests with the IP functions, other departments often fail to comprehend the importance of trade secrets and the need to protect them. This leads to a lack of alignment between departments, inhibiting the efficient use and protection of trade secrets.


  1. Missed Opportunities: Trade secrets can be created and utilized in various parts of the organization. Without a coordinated effort, valuable trade secrets may go unnoticed, or their potential may remain untapped.


  1. Ineffective Protection: Over-reliance on legal departments can result in a compliance-focused approach, rather than a proactive strategy for protecting trade secrets. Legal teams may not be equipped to implement technical safeguards or raise awareness among employees.


  1. Lack of Accountability: Without clearly defined roles and responsibilities across departments, no one takes ownership of the trade secret strategy, leaving it in a state of ambiguity.


Designing a Comprehensive Trade Secret Management System:

To address these challenges, it is essential to design a comprehensive trade secret management system before investing in supporting software. Here's how:


  1. Define What Trade Secrets Are: Clearly define what constitutes a trade secret in your organization. Differentiate them from other forms of intellectual property.


  1. Identify Key Stakeholders: Determine who should be involved in the trade secret management process. This includes R&D, production, sales, marketing, IT, Finance, Legal, and other relevant departments.


  1. Establish Ownership: Define who owns the trade secrets in your organization. Is it the department that generates them, or does ownership belong to the company as a whole?


  1. Create Policies: Develop robust policies that outline how trade secrets should be created, managed, protected, and shared within the organization.


  1. Evaluate Trade Secrets: Establish criteria for evaluating the value and importance of different trade secrets. This ensures that resources are allocated appropriately.


  1. Decision Makers and Problem Owners: Clearly identify decision-makers and problem owners for trade secret management. This could be a cross-functional team or a dedicated role responsible for trade secret strategy.


  1. Training and Accountability: Ensure that all employees are aware of the importance of trade secrets and their role in protecting them. Hold individuals and departments accountable for their responsibilities.


  1. Align Processes: Align trade secret management processes across functions and departments to promote efficient use and protection.



In conclusion, the purchase of a trade secret system is not a magic bullet solution. To make the most of your trade secrets, invest time and effort in designing a comprehensive trade secret management system tailored to your organization's needs. Only then should you consider purchasing supporting software. By taking a strategic approach and involving all relevant departments, you can maximize the value of your trade secrets and ensure they remain a competitive advantage for your organization.

Remember, trade secrets are not just a legal matter; they are a strategic asset that requires a coordinated effort across the entire organization. So, don't rush into buying a system—design your system first!

By adopting this approach, you can transform the way your organization manages trade secrets, turning them into a source of innovation, competitiveness, and long-term success.


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