Protecting Business Secrets to Improve Value Creation

This chapter aims to provide an in-depth review of the strategies and practices necessary to protect business secrets and thereby enhance business value. Our discussion will cover the legal principles governing breach of confidence, as well as the management processes and best practices in security that practitioners should implement to safeguard their business secrets from breach. Throughout this chapter, business secrets refer to trade secrets and any sensitive information. The digitalization of business processes and the explosion of digital services amplify the challenges associated with protecting data, confidential information in general and especially business secrets. A general trend in the protection of business secrets, by effect of substantive law or case laws, is to place greater responsibility on the recipients of information (and employees in particular) not to take or misuse confidential information, provided that the owners of such information take reasonable steps to protect it. We describe in Chap. 5 the regulation and case law applicable to business secrets and breach of confidence in each of the USA, Europe, and the UK. To further aid in illustration, examples are provided in Singapore and the Philippines, respectively. Additionally, this chapter describes how companies can implement a governance and business secrets policy addressing the physical, human, and IT elements necessary to reduce the overall risks of business secret leakage and loss of value. Finally, this chapter looks at mechanisms that can be deployed during negotiations and deal-making. We consider when and how to use non-disclosure agreements (NDAs), and where memorandum of understanding (MOUs) can capture details of business secrets.