In a post entitled, Trade Secrets and Third Parties: Top Tips to Prevent Theft, Create.org lists its “five top tips” for protecting your trade secrets, all of which apply to China.

Nothing earth-shattering here, but this is actually a really good list (meaning I agree with it 100%) and it never hurts to review the basics, so here goes:

Conduct a strategic assessment of the company’s trade secrets, a process which should incorporate the company’s trade secret policy, the partner’s code of conduct, an evaluation of which trade secrets can be transferred, and careful consideration of the most appropriate operational structures.

Undertake appropriate pre-contractual due diligence, including a thorough assessment of any potential third party partner, evaluation of other IP-related issues, analysis of the partner’s employment and nondisclosure agreements, and investigation of the partner’s subcontractors.

Employ strong contractual protections to safeguard the company’s trade secrets both during the business relationship and afterward, and consider contractual provisions specifically relating to the partner’s employees and subcontractors.

Utilize appropriate operational and security measures to ensure that the correct personnel, physical security measures and technical safeguards are in place to protect the company’s trade secrets. Systematic engagement with the partner can help bolster the effectiveness of these measures.

Take appropriate action after the business relationship has ended, to ensure that departing employees and former business partners honor their continuing obligation not to disclose trade secrets.

Anything else?

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Dan Harris

I am a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

I mostly represent companies doing business in emerging market countries. It has taken me many years to build my network and it takes constant communication and travel to maintain it. My work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

I was named as one of only three Washington State Amazing Lawyers in International Law, I am AV rated by Martindale-Hubbell Law Directory (its highest rating), I am rated 10.0 by AVVO.com (its highest rating), and I am a SuperLawyer.

I am a frequent writer and public speaker on doing business in Asia and I constantly travel between the United States and Asia. I most commonly speak on China law issues and I am the lead writer of the award winning China Law Blog (www.chinalawblog.com). Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed me regarding various aspects of my international law practice.

I am licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at my firm, I focus on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.

  • Ward Chartier

    A few tricks I’ve observed or used through the years:

    1. Imbed an intentional error, like a typo, somewhere with the software, software comments, or documentation.
    2. For higher level assemblies, source key components from several different suppliers, preferably long distances away from one another.
    3. For higher level electronic systems, write operating software that interrogates each major sub assembly for correct responses. Only sub assemblies from authorized suppliers will be able to provide correct responses. The operating software will lock out unauthorized sub assemblies.
    4. Add a subtle feature which has neither functional nor aesthetic value. Unauthorized suppliers who copy that feature will have had to steal the IP. For example, add a little non-toxic heavy metal (i.e. bismuth) to plastic resins or paints. Such adulteration can be easy to detect if one looks for it. Unauthorized copies will not show the adulteration when tested.

    I’m sure readers can list other similar means.

    Assume that somebody will steal IP, and design products so that detecting stolen IP will be relatively easy.

  • Michael Riepl

    Number six: Don’t do business in China. It’s a really big world we live in. There’s a lot of opportunities out there – outside China!!!

    • blwinters

      I think you’re reading the wrong blog.