About the author: PJ Kee is an associate at the Jones Walker law firm in New Orleans. He and a few colleagues recently launched Trade Secret Insider, which chronicles legal insights on trade secrets, non-competes, computer fraud and confidential data theft. This article was originally posted on tradesecretsinsider.com.
On May 13, 2014, before a Senate subcommittee, the FBI’s Assistant Director for the Counterintelligence Division testified about the bureau’s efforts to combat economic espionage and trade secret theft—which cause, according to the Office of the National Counterintelligence Executive, “tens or even hundreds of billions of dollars annually to the American economy.”
Fighting economic espionage and trade secret theft remains a top priority. This was the overriding message of the Assistant Director’s opening statement, as he walked the subcommittee through the government’s coordinated law enforcement efforts, as well as the FBI’s attempts to raise awareness about these threats (including a plug for the FBI’s recently released film The Company Man: Protecting America’s Secrets that dramatizes a recent trade secret theft case—trailer below).
The Assistant Director also offered salient advice on how companies can protect themselves from insider threats. He first noted a trend. Companies who learn about trade secret theft often pursue private negotiations or civil litigation—without alerting law enforcement. The FBI wants this to change:
The FBI is committed to ensuring companies have an established line of communication to report concerns about possible economic espionage or trade secret theft to law enforcement. But the FBI must assure companies the government will work to protect their proprietary information from disclosure during prosecution, so that more companies are willing to come forward and report concerns about possible trade secret theft.
But the bureau cannot address the threat of trade secret theft alone. Companies must take steps to protect their information more proactively, the Assistant Director advised. Here are the FBI’s suggestions that companies should implement:
- Mark sensitive material as secret or proprietary information;
- Limit access to protected material (and if a piece of information is critical to the long-term success and profitability of a company, limit access to those employees who have a need to know);
- Monitor who accesses the protected material;
- Provide regular employee training and more frequent notices regarding company policies on protecting trade secrets;
- Consider implementing non-disclosure agreements with employees; and
- Evaluate internal operations and policies to determine whether current approaches are tailored to the company’s risks posed by insider threats.
The Assistant Director also emphasized employee education. Companies need to educate employees on detecting warning signs that a colleague may be stealing or planning to steal trade secrets. Warning signs could include:
- Working odd hours without authorization;
- Taking home company proprietary information;
- Installing personal software, or personal media, on company equipment;
- Taking short trips to foreign countries without notification or for unexplained reasons;
- Enjoying a sudden influx of wealth; and
- Living beyond his or her means.
Recognizing potential theft is not enough, though—employees must also timely report any suspicious behavior to appropriate company personnel. But this will only occur within a workplace culture where protecting trade secrets is consistently emphasized as being crucial to the company’s continued success.
The Assistant Director essentially sent out a call to arms: while the federal government is committed to protecting U.S. companies from economic espionage and trade secret theft, companies must take the lead in protecting themselves. And his suggestions for doing so are right on point.