Tag Archives: know-how

Trade Secrets: “What People Need to Know” — Sen. Coons, IP experts, scheduled to speak May 29

Trade secrets, or know-how, frequently in the news, are simultaneously among intellectual property’s most valuable and misunderstood rights.

A luncheon briefing designed to put these essential rights into clearer perspective will be held at United States Chamber of Commerce headquarters in Washington on May 29 – “Understanding the Secret to Trade Secrets: What People Need to Know Today.”

The briefing is being hosted by the Center for Intellectual Property Understanding (CIPU) in conjunction with the Global Innovation Policy Center (GIPC).

The event will clarify (1) what trade secrets are, (2) why they are more important now, (3) how they are used and (4) their impact on innovation, competition and trade.

Panel coverage includes:

  • Trade secrets’ role in promoting commerce and security
  • The hidden value of “negative” know-how
  • How trade secrets compliment patents and trademarks; their drawbacks
  • U.S., China and trade secrets today

In additional to Senator Chris Coons (D-DE), Vice-Chairman, Select Committee on Ethics and proponent of IP rights, speakers will include

  • F. Scott Kieff (U.S. International Trade Commission chief, 2013-2017)
  • James Pooley (Deputy Director General of the World Intellectual Property Organization, 2009-2014)
  • Brian Hinman (Aon IP Solutions; former Chief IP Executive, Philips and Verizon, and head of licensing at IBM)

“Trade secrets, or know-how, frequently comprise the most valuable part of a businesses’ IP portfolio,” says Marshall Phelps, former Vice President of IP Business and Strategy at Microsoft and IBM, and a member CIPU’s board of directors.

“Trade secrets can be as important as patents or trademarks. Despite the news coverage regarding IP and China, little known about how know-how works in practice.”

The Defend Trade Secrets Act of 2016 (DTSA) brought trade secret misappropriation under federal jurisdiction.

For the briefing agenda, go here.

To request an invitation, write registration@understandingip.org. Registration is free, but space is limited.

Image source: CIPU; foodsafetynews.com; GIPC

“Know-go” – negative know-how that can be protected as a trade secret is among IP’s most overlooked assets

Thomas Edison famously said: “I have not failed. I have just found ten thousand ways that won’t work.”

After hundreds of experiments with different materials for a long-lasting light bulb filament, Edison, as much as businessman as an innovator, zeroed in on carbonized thread.

“At that point,” says James Pooley, author of SECRETS: Managing Information Assets in the Age of Cyberespionage, “Edison had two trade secrets: first, the identity of the best material. And, second, the identity of the materials he had tried.”

Negative Know-How

A business’ lack of success, a matter of specialized know-how more aptly called “know-go,” is protected under trade secret law because it is valuable not only to it but to a competitor who wishes to catch-up without spending as much time and money.

Know-how, sometimes known as show-how, is the “secret sauce” that can give an otherwise mundane invention meaning. But the value of negative experience — of what not to do; of repeated failures and near successes — should not be under estimated.

The Intangible Investor in the December IAM magazine looks at “Failure – IP’s most underrated asset.” The full piece can be found here.

Costly Mistakes

A popular television series, “What Not to Wear,” has run for 345 episodes over ten years. The show advises women and men about how to spare themselves the cost, time and embarrassment of fashion faux pas. The value, the show’s loyal followers reason, is not only in identifying the right clothes choices, but in avoiding the more costly mistakes.

Information, data or experience that spares businesses time, cost and potential embarrassment is an asset, often an invaluable one, especially to large, risk-adverse businesses where R&D is at a premium.

Know-go is also attractive to potential acquirers who need to know how far towards a solution a target may have progressed.

Closely related to the concept of negative information is the idea that you can be guilty of trade secret theft (“indirect misappropriation”) even though your product looks very different, or significant investments have been made in your own research.

“Intangible assets of this nature that serve to avoid failure,” says Pooley, former Deputy Director of the World Intellectual Property Organization (WIPO), “can be more valuable than knowledge that enables success.”

Image source: rundlesafety.co.za; wikipedia.org;

“Secrets” is required reading for informed managers and investors

In an information age that worships data and transparency, the trade or business secret has never been more valuable.  

“Secrets” is an essential guide to understanding, using and profiting from trade secrets, or “know-how,” perhaps the most misunderstood of intellectual property rights.

What I like best about James Pooley’s new book, subtitled Managing Information Assets in the Age of Cyberespionage, is the way he explores the ontology of proprietary business information – what it means, how it has come to exist, and how these secrets can be protected and monetized. He reminds us that even “negative” information can have significant business value.

A Silicon Valley veteran, Pooley has served as a lawyer, manager, diplomat, professor and writer. From 2009 to 2014 he was Deputy Director General for Innovation and Technology at the World Intellectual Property Organization (WIPO), an agency of the United Nations, where he ran the international patent system.

His seminal Trade Secrets for lawyers and Trade Secrets: A Guide To Protecting book_sideProprietary Business Information, first published in 1982 and aimed at business managers, are leading books in the field. Both have been reprinted.

Preferred Protection

Pooley says that despite the attention paid to patents, trade secrets are the preferred method of IP protection for R&D-intensive companies, and are relied upon at more than twice the rate of patents. He says that there are good reasons to have trade secrets:

“They’re cheap: you don’t have to pay for government certification. They’re broad, covering many things that patents can’t (indeed, they cover just about any business information, like sales data and strategic business plans), and unlike a published patent, you don’t broadcast to the competition what you’re doing.”

Enforcing a trade secret typically falls under state law, and there is no Patent Trial and Review Board or history of adverse judicial decisions to challenge their existence. [UPDATE: The Defend Trade Secrets Act, enacted on May 11, 2016, brought trade secrets under a unified federal law.]

“Secrets” provides readers much practical advice, including forms for confidentiality, non-confidentiality and consultant agreements. It is a handy and deceptively insightful book, and will open the eyes of even experienced managers. The book includes sample non-disclosure and other agreements, and suggests best-practices and safeguards that should be put in place before an employee leaves a company to discourage him or her from using or sharing proprietary information.

In reading this book we are remind us that secrets falling into the wrong hands can destroy a project, or even bring down a company. The same technology that enables seamless communications, also makes data theft easy, cheap and increasingly difficult to detect.

Know-How & Patents

Trusting employees, competitors, consultants with classified information, such as the specialized know-how, especially those that bring inventions or patents life, is a high-wire act that managers need help balancing. “Secrets” provides valuable guidance to managing those critical first-steps.

Trade secrets come in many forms. At some companies, patent licenses are effectively “given away,” because they facilitate lucrative technology licenses or know-how sales that enable a licensee to practice an invention more profitably. Just ask IBM. Know-how, sometimes marketed as “consulting,” is frequently the high margin, cash generator that get’s overlooked – the proverbial tail that wags the dog.

For more information about “Secrets,” to order, or for a free digital sample, go here.

Image source: veruspress.com; J. Pooley 




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