Business

On the job, some things are better left unsaid

Ever gotten burned by sharing a secret? We all probably have. I think we all at one time or another also have acquired a juicy nugget that makes us feel exclusively in the know.

And despite our best intentions, it's human nature to want to blab to the first curious ear we find. But just as in everyday life, blabbing when it comes to business can be devastating.

Business secrets are the keys to competitive advantage -- and keeping those secrets is paramount to a sustainable business.

Benjamin Franklin once said, "Three may keep a secret, if two of them are dead." A little harsh maybe, but the underlying lesson is a good one. If you have a secret upon which your livelihood relies, the only way to truly protect it is not to share it even once.

Jeff Sakoi of the Seattle-based Seed Intellectual Property Law Group specializes in protecting company secrets, and recently spoke about the topic to the Three Rivers Entrepreneur Network.

He described "trade secrets" as including technical, scientific, financial and other commercial information that has value by virtue of not being known by third parties, and which is subject to reasonable efforts to maintain its secrecy. Take the famous Kentucky Fried Chicken recipe for example. The entire international chain is based on the uniqueness of that delicious crispy coating.

"It's been reported that only one person in the entire corporation has the combination to the safe in which the handwritten recipe resides," said Sakoi, "and only two people in the company know the recipe in its entirety. Incidentally, those three people are forbidden from traveling together."

After all, if it could be replicated, what would differentiate KFC going forward?

"The steps taken to maintain the secrecy of the information have to be reasonable in light of the secret being protected," Sakoi added. "There is a decision that needs to be made about whether to obtain patent protection for trade secrets that are indeed patentable -- and not all trade secrets are -- which can make the information public yet protect it, albeit for a finite period of time."

In comparing the two options, Sakoi said the inherent difficulty of maintaining secrecy, the threat of reverse engineering and the inevitability of eventual public disclosure favors obtaining patents over maintaining trade secrets.

However, trade secrets can be beneficial when it comes to the shelf life of your unique advantage, as patents expire 20 years from filing.

Another issue to think about is the way we do business today.

"Our ability to store large volumes of information on small devices and beam things around the world is a growing problem in the world of trade secrets," said Sakoi. "People aren't necessarily recognizing the value or taking reasonable steps to maintain the secrecy of what they're sending."

Identifying the existence of a trade secret is step one to protecting it. Intellectual property experts recommend companies do systematic routine audits of their company's information and implement a written policy, including practices to minimize the blab-factor among current, departing and former employees.

Proper trade secret protection enables companies to derive value from them by maintaining a competitive advantage, selling them, or licensing them to others. Don't wait to identify and protect yours. They may be the key to your company's competitive success -- and its very existence.

-- Ali Madison is with Pacific Northwest National Laboratory's Economic Development Office. E-mail: ali.madison@pnl.gov.

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