Baker McKenzie is proud to present The Board Ultimatum: Protect and Preserve (The Rising Importance of Safeguarding Trade Secrets), our new report published in partnership with Euromoney Institutional Investor Thought Leadership.
In this report, we find that that trade secrets have become even more important than trademarks in today’s digital economy. Yet despite the rising commercial power of trade secrets, many companies aren’t taking basic steps to protect them from theft by employees, suppliers, hackers and other third parties.
Based on a survey of more than 400 executives across five industries — healthcare, financial services, industrials, ICT and consumer goods and retail — the report examines how the leaders of multinational companies view their trade secrets, who they see as the greatest threats to these secrets and what they do (and don’t do) to protect them.
Key findings include:
1. Trade secrets and IP play an essential role in companies’ brand value and corporate strategy. In our survey, 82% of respondents said their trade secrets are an important, if not essential, part of their businesses. Among industries, 46% of financial services executives said they consider their trade secrets to be essential to their corporate strategy, followed by industrials and ICT executives (both 41%), healthcare (35%) and consumer goods and retail (27%).
2. Trade secret protection is a board-level issue. Among our respondents, 61% said that protecting their company trade secrets and IP is a board-level issue, reflecting the rising value of trade secrets in our digital age. Nearly one-third ranked it a top-five concern.
3. One in five companies has suffered trade secret theft. Among the companies in our survey, 20% said they’ve had trade secrets stolen. Another 11% said they don’t know whether they’ve been the victim of misappropriation, indicating that the incidents of theft are likely higher. The healthcare industry is by far the most targeted, with 33% of those executives reporting they’ve suffered trade secret theft, followed by industrials (18%) and ITC (17%).
4. Corporate leaders most fear theft by former employees. When asked to identify the greatest threat to their trade secrets, 32% of our respondents said they feared having trade secrets stolen by former employees most, followed by suppliers, consultants and other third parties (28%), and current employees (20%). Another 15% said they most fear rogue or state-sponsored cybercriminals or hackers.
5. Only one-third of companies maintain inventories of their trade secrets and have action plans for responding to theft. Despite the heightened awareness of the importance of trade secrets, only 31% of our respondents said they have procedures in place to respond to the threat of or actual theft of trade secrets. Given that trade secrets are no longer protected once they become public, the question is how much more they should be doing to manage this risk.
As well as revealing the challenges clients face, the campaign also provides a trade secrets checklist to help companies like yours better protect its valuable information.
We encourage you to access The Board Ultimatum: Protect and Preserve (The Rising Importance of Safeguarding Trade Secrets) report now and hope you find it useful.