Readers of the latest Raconteurs IP Report may be sobered to learn that 28% of IP, Cyber and risk professionals say their “company has experienced a material IP incident over the past two years” – with 42% of those involving trade secrets, as compared to 26% copyright and 24% patents.
The Report goes on to cite the case of Uber acquiring the self-driving startup Otto in 2016. Ben Edwards notes, “[I]t thought it was hiring some of the industry’s smartest engineers; what Uber also purchased was a lesson on the importance of intellectual property.” It transpired Otto’s founder, Anthony Levandowski, had downloaded files from his previous employer, Waymo, before his leaving – a fact Uber had overlooked as part of their acquisition due diligence. Whilst Uber claimed not to have received or used any of Waymo’s trade secrets it ended up paying $245 million in legal settlement.
Tilman Breitenstein (IP Group Leader, BASF) comments in the Report, “There are not many companies that do have a solid trade-secrets programme in place; even if they know they have something, they lack the skills and knowledge of how to protect it…Startups and smaller companies often have a higher fluctuation of staff and that makes it much more difficult for those businesses to protect their trade secrets. They also need to attract investors, which means going out and talking about their business, which also puts them at higher risk.”
The growing importance of considering trade secrets as part of a wider IP strategy for the business is amplified by Maria Anassutzi (IP Lead European Counsel at Canon) in the Report,”[S]ometimes an IP strategy is just thought of as a patent strategy, but it is much more than that.” The Report goes on recognise one common mistake companies make is, “not aligning their IP strategy with their overall business strategy.”