November 30, 2022
Overview
Since the mid-1980s, there has been a significant shift in what drives a company’s value, from physical assets such as buildings and machinery to intangible assets like intellectual property. For many, that IP includes trade secrets — information whose value to the business rests in the fact that no one else knows it. Exposing that information might result in a loss for the business.
Think about a popular soft drink’s secret formula, or the proprietary seasoning recipe for a well-known fried chicken franchise. While many have tried to copy them, those secrets remain essential to the value of the companies.
Organizations are increasingly recognizing the value of their intellectual property, and they’re growing more concerned about the risks surrounding it. Aon’s 2022 Executive Risk Survey saw valuing/protecting intellectual property ranking ninth among the top risks worrying executives, up from 16 in 2021.
Intellectual property also includes such items as trademarks and patents — valuable assets to an organization. But by registering those assets, the business is exposing them. Trade secrets, while intellectual property, are in a different category.
“You don’t necessarily register a trade secret to say that you own it,” says Scott Swanson, security advisory practice leader at Aon Cyber Solutions. “Ownership of a trade secret starts with proving it exists followed by the person or entity with legal or title to the trade secret. Add to that, notice and access. It is the access part that really plays into meta data and keeping it reasonably secret within an organization.”
Protecting an individual’s or company’s trade secrets requires addressing both insider and external threats, Swanson says, including inadvertent exposure by oneself or from people within the organization. An essential part of that effort is accounting for the trade secret’s metadata — those tiny bits of information that, if exposed, might be assembled by outsiders to reveal valuable confidential information.