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What litigation tells us about the dangers of IP theft

Dave Burtt and Donald Closser | Aug. 20, 2013
While many companies are now stepping up security measures to better identify and protect their IP, still too many companies and employees fail to grasp the seriousness of protecting IP.

Common scenarios
Recent IP lawsuits highlight typical behavior of employees who leave to work for a competitor:

* The Back-Up Plan. A management-level employee with a heavy-travel schedule has a company-issued laptop. She stores all of her company confidential information on this device along with a significant amount of her valuable personal files (photos, iTunes, etc.). She also doesn't trust the company's back-up procedures, having once lost a significant amount of her own work product due to a virus, and so has been routinely (and secretly) backing up her entire hard drive every three months. While she returns her laptop to the company during her exit interview, she makes no mention of the recent back-up she stores at home.

* The Proud Artist. A software architect pours his heart and soul into code he's been writing and de-bugging for the past year. Like an artist commissioned to paint a private portrait, this employee is proud of his work, which enabled his employer to launch its product months ahead of schedule. Although he signed, and claims to understand, the Inventions Assignment Agreement that was part of his offer package, he honestly believes this source code belongs to him because he wrote it. For this reason, as he cleans up his workstation the day before announcing his resignation, he accesses the server and copies the code he will one day proudly share with his children.

* The Shifty Sales Guy. A senior account executive for a major bank has been shaking hands and building a massive network of high net worth individuals since getting his MBA 20 years ago. What started as a binder of business cards has evolved into an Outlook contacts file (.pst) with more than 4,000 entries. Without a second thought, the newly hired senior account executive loads his entire file onto the company's network the first week on the job. Over the course of the next five years, he constantly adds to this database including contact information for prospects and leads sourced by the company's lower-level sales team. Often, in addition to name, address, and contact information, he adds key client information, including net worth, investment preferences, and the type of whiskey the client prefers during the holidays. Like he did when he left his prior job and without permission and without notifying the company the senior account executive copies his entire .pst file before tendering his resignation because, in his mind, these contacts belong to him. If pressed, he'll explain that all of his relatives' birthdays are stored in this .pst file and that's why deserves to take it with him.

These employees each took information their employer considered trade secret. But they are unlikely to inform a new employer of this conduct because doing so would necessarily admit a violation of the employer's terms and conditions (and may even lead to termination). That's because smart companies require new hires, as a condition of employment, to not only abide by all continuing obligations to any former employer, but also to refrain from bringing such information to their new job. Nevertheless, Symantec found that 56% of employees feel it isn't wrong to take and use a competitor's confidential information.


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