When an insider by the use of technology, steals the proprietary information from the company it is said to be an insider’s theft. One of the most damaging ways an insider can compromise a company’s value is by stealing its intellectual property (IP). Once the IP leaves the company it is extremely difficult, often impossible, to get it back. A company cannot underestimate the value of its secrets, product plans, customer lists or any other IP.
Following are some of the common Intellectual Properties which are highly likely to get stolen:
- Company’s software or source code
- Company’s business plans, proposals, and strategic plans
- Customer’s confidential information
- Product designs, formula, trade secrets, etc.
The most common insiders who steal the company’s IP are current employees including but not limited to scientists, engineers, programmers, managers, or sales people. Current employees already have the authorization and access to the intellectual property and they usually steal the information during their regular work hours. As all the information is authorized, it becomes a difficult task for the company owners to distinguish between the illicit access from the legitimate access.
This kind of theft has been a devastating impact on many IT/Software companies in the last decade. Intellectual property worth millions of dollars has been lost by those companies as important confidential information is given to the competitors creating a great loss to the companies. Many times competing products have been brought to market by the former employees creating a monetary loss for the company.
Recent Example: On February 23, 2017, Waymo LLC, formerly Google’s self-driving car program and currently a stand-alone company owned by Google’s parent company filed a lawsuit against Uber Technologies, Inc., Ottomotto LLC, and Otto Trucking LLC for trade secret misappropriation, patent infringement and unfair competition relating to Waymo’s self-driving car technology. Waymo claims that Otta and Uber have stolen its intellectual property in order to avoid incurring the risk, time, and expense of independently developing their own technology and this calculated theft reportedly netted Otto employees over half a billion dollars and allowed Uber to revive a stalled program, all at Waymo’s expense.
This lawsuit focuses on the actions of one of the former manager, Anthony Levandowski at Waymo, who now leads a parallel self-driving car program for Uber. Waymo claims that before resigning Mr. Anthony downloaded more than 14,000 highly confidential and proprietary files shortly before his resignation. Mr. Levandowski then set up his own new venture which eventually became Otto. A number of Waymo employees subsequently also left to join Mr. Levandowski’s new business, downloading additional Waymo trade secrets prior to their departure. Otto launched publicly in May 2016 and was acquired by Uber in August 2016 for $680 million. (Waymo LLC v. Uber Technologies, Inc. et al )
This case stands as a cautionary tale that all the competitors can rely on state and federal laws to protect confidential and proprietary information from being exploited by their competitors. Employers who rely on confidential information to compete should take steps, like Waymo alleges it took, to protect proprietary information.
Laws that prohibit trade secrets theft are often unavailable when employers fail to take reasonable measures to protect their secrecy.
Some fairly easy steps can be taken as follow:
- Restricting access to confidential information for only high-level employees on a “need to know” basis and requiring and enforcing confidentiality and non-compete agreements for all the employees.Companies can keep storage devices containing that information in a locked and secured area.
- Employers planning to hire an employee of a competitor should be highly vigilant about enforceable non-compete agreements and potential trade secret theft.
- Monitoring of online actions could be beneficial for preventing the theft of IP.
- Train employees on the acceptable use policy, educate employees on the Acceptable Use Policy during the onboarding process and require that they sign a statement saying they have received the policy. Also, provide all the employees a means to report any suspicious activities about other employees who are a risk for stealing data.
- Ensure that sensitive corporate information is protected appropriately with passwords or multi-factor authentication.
- Properly dispose of sensitive and confidential data and remove all data from computers and devices before disposing of them.
- Keep the software and operating systems up to date by installing updates to security, web browsers, operating systems, and antivirus software as soon as they become available.
This information should prompt all the employees and the employers to keep their intellectual property safe and help them fight against this heinous activity called INSIDER’S THEFT.
Manali Shah earned her Master of Laws (LLM) from University of California Berkeley, School of Law. She is a licensed Indian Attorney having her Bachelor’s degree in Commerce and Law with Honors in Criminal and International Law (B.com LLB (Hons)). Manali is passionate about emerging laws in the field of technology and motivated to implement it for the betterment of the society. In her free time, she loves to travel and meet people from all over the world.