Last week, I published part 1 of my interview with Pamela Passman, CEO of CREATE.org regarding its recent trade-secrets report. Here’s part 2:

Protecting Trade Secrets: You have done an excellent job setting forth a framework for companies to protect their trade secrets. But I have two issues with your approach. First, I am concerned that this process will result in the creation of documents that, if produced in litigation, will undermine misappropriation claims. This concern can be mitigated if an attorney is involved in creating and maintaining these documents, keeping them as attorney work product.

Pamela Passman: For most companies, lawyers will be involved in implementing the framework we propose and actively engaged in developing the documentation.  However, for many companies in emerging markets, there are small legal teams inside companies and outside lawyers are not generally engaged other than for disputes.  That should not limit a company’s focus on prioritizing, documenting and securing trade secrets, as in most cases, the ability to demonstrate that you have secured your trade secrets is critical to seeking redress if they are misappropriated.

PTS: Second, your approach may be difficult for small and midsize businesses, who have limited resources and in-house capabilities, to implement. 

PP: For many small and mid-size companies, trade secrets are at the core of their value and ability to compete and innovate. While many can’t implement a full comprehensive program, they should consider scaling the recommended steps in a way that is appropriate to the company.  For example, at CREATe.org, we are working with private equity firms that want to ensure that their portfolio companies are aware of leading practices and have the ability to implement business processes to protect IP and prevent corruption. Although the firms are small in size, they scale accordingly by prioritizing areas for improvement.

PTS: Turning to the report’s views of the future, you talk about “the emergence of walled gardens or the creation of IT networks that are separated from the wider Internet.” Can you elaborate more on what the “walled gardens” will look like? How would this differ from company intranets and smartphone apps that exist today?

PP: The walled garden scenarios stemmed out of recent moves that could point towards countries (or sectors or groups of entities) segmenting internet traffic. For example:

• German telecom giant Deutsche Telekom, in which the government still owns a minority share, has publicly discussed the potential for German companies to place some information and activities on a separate, national internet system. Deutsche Telekom’s proposal is unlikely to be adopted at this point and would require major regulatory, technical and policy changes in Germany and the European Union. However, its announcement confirms that some of the world’s most advanced countries and companies are thinking about walled gardens as an option going forward.
• Brazil’s government is also considering how it might segment or wall off parts of its internet traffic and emails. Sao Paolo is reacting to the recent US Government contractor who claims that US intelligence agencies were snooping on a large target set.

PTS: Finally, what are your next steps now that the report has been issued?

PP: There is tremendous interest in the topic of trade secret protection. As you know, several months ago the European Commission published draft rules to thwart the theft of trade secrets. This initiative, along with companies facing increased threats, have prompted invitations for CREATe.org to present our report findings to business organizations around the world.  We will be in France,  Germany and China in March, and Mexico in April meeting with companies and business organizations interested in comprehensive ways to advance IP protection, and in particular, mitigating trade secret theft. We are also presenting at conferences and via webinars in the U.S. and elsewhere.

Additionally, CREATe.org continues to work with companies around the world to help them put systems in place to better protect IP, and to work with their supply chain and other business partners. We do this with our three-step service, CREATe Leading Practices for IP Protection, which offers an assessment, benchmarking and tools and resources designed to improve systems for IP protection. It is currently available in English, Brazilian Portuguese, Chinese and Spanish.