Once Donald Trump takes office, dramatic policy changes will reverberate throughout our economy. Trade secrets are no different. While the Trump administration’s policy objectives remain largely unknown in this area, it’s worth considering how companies should prepare to protect their trade secrets during the Trump presidency.
To start, I expect President-Elect Trump to, at a minimum, back off of President Obama’s call for a dramatic reduction in the use of noncompete agreements. While President Obama took a pro-employee viewpoint, Trump seems more inclined to favor the employer’s perspective. But since noncompetes are legislated at the state level, this policy change will not have immediate results. At most, the pace of noncompete reform may slow. Companies still need to carefully consider their use of noncompete agreements, as I discussed in a previous post.
In the short term, however, Trump’s policies may impact the frequency and scope of state-sponsored trade-secret theft and cyber attacks. Already, Trump is making waves by communicating with Taiwan’s president. If Trump rejects the U.S.’s longstanding “One China” policy (i.e., no direct contact with Taiwan’s government), China may retaliate — including by increasing its efforts to raid U.S. companies’ intellectual property.
I’m no expert in geopolitics, but it seems obvious that Trump’s election has added substantial uncertainty to the U.S.’s foreign policy. Trump’s statements thus far suggest that he will abandon, or at least dramatically reduce, multinational treaty efforts in favor of direct negotiation between the U.S. and other nations. And he has already said that he wants to bolster the U.S.’s capacity to initiate cyber attacks.
It wouldn’t surprise me if Trump follows the old advice you hear in the movies about prison: as soon as you get there, find the biggest, meanest guy and punch him in the face. Should President Trump take this attitude towards a nation like China, such as by establishing direct diplomacy with Taiwan, cyber warfare is not out of the question. At a minimum, I see an increased likelihood of state-sponsored cyber attacks and trade-secret theft during the Trump Administration. This creates risks for businesses of all sizes, not just large corporations.
But this is all just conjecture. We will all find out together how President Trump’s policies impact companies trying to protect their trade secrets. While it’s not time to start stockpiling canned goods, the increased uncertainty justifies even greater urgency for companies—regardless of size—to invest in IT solutions to protect against hacking, legal solutions that address theft or improper disclosure of trade secrets, and backup/redundancy systems that minimize damage in the event of a hack.