Terrell Miller, intellectual property partner, counselor and registered patent attorney with Foley & Lardner LLP, offers guidance on how companies can protect trade secrets at a time when they’re especially vulnerable.
The recent labor and supply chain shortages have heightened the risk of entities stealing trade secrets and intellectual property from manufacturers, Miller says. In industries such as oil field exploration, the need for equipment is currently so great that some companies are willing to look the other way when unauthorized producers offer items for sale. It’s a matter of “willful ignorance” on the part of buyers who are desperate to keep operations running and meet heavy demand. They’re exhibiting “blatant disregard” for IP protection.
Miller describes the situation as a “dual risk,” coming internally from employees who might be moving to a competitor and taking trade secrets with them, and outside competitors that seek to duplicate or reverse-engineer critical equipment or tools. “It can even be third-party vendors who say, ‘I can make you a copy of that tool and do it cheaper.’ And businesses are saying, ‘What can you get me?’”
Manufacturers should be taking steps to protect trade secrets and IP as a matter of course, but it’s especially important now to exercise proper diligence, Miller says. They need to make sure that they have contracts in place with distributors and customers that prevent unauthorized duplication, use or sale of patented equipment. Patents should be filed in multiple relevant jurisdictions, Miller notes. Patents serve as protection in cases where the equipment in question is already on the market, and it’s not a matter of guarding trade secrets.
In addition, Miller suggests, manufacturers should consider leasing out or licensing their proprietary equipment instead of selling it outright, a strategy that gives them better control over sensitive items.
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