Benchmarking project

on trade secret asset management

This benchmarking triggers you to refine the asset management
Benefit:
You can compare and contrast your trade secret asset management
against other companies
Kazuhiro Matsumoto

www.london.edu

Agenda
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What is trade secret?

Why is trade secret important?

Why is trade secret asset management important?

Why benchmarking?

Approach

Draft of survey questions

Timeline

Contact information

What is trade secret?

Broadly speaking, any confidential business information which
provides an enterprise a competitive edge may be considered a
trade secret.
Typical examples of trade secret
Formula of beverage

Manufacturing process

Drawing

Why is trade secret important?

Reinforcement of law
increases the importance of trade secrets in business
Recently, a law related to trade secrets has been reinforced. In US, the
Defend Trade Secrets Act of 2016 (DTSA) was signed into law on 11
May 2016. Similarly, in Europe, the EU Trade Secrets Directive was
adopted on 26 May 2016 by the European Council.

Why is trade secret important?

Trade secret is now becoming a business critical issue.
Legislative developments
How can we attack and defend in trade secret
legal actions?

Finance & tax developments

How can we transfer value based on trade
secrets?

Corporate governance
How can we control confidential information upon
hemorrhage of workers?

Companies embracing open innovation

How can we reconcile exchange of information with
leakage of trade secret?

Why is trade secret asset management important?

Trade secret asset becomes valuable only if it is well-managed
Some would argue that trade secrets and know-how are the crown
jewels of any intellectual property portfolio. However, they are fragile
and only are of value if kept secret.
Requirements to acknowledge a trade secret are the following three:
1. Information must be non-public
2. Information must be useful
3. Information must be maintained in secrecy
- Limit access
- Apply reasonable protection mechanism

Why benchmarking?

You can compare and contrast your trade secret asset

management against other companies
Benchmarking is a process of comparing and contrasting some aspects
or elements of an organisation against those of another. The goal of any
such exercise is to gain information that will help the organisation take
action to improve its own performance, by understanding how well other
organisations are doing and where its improvements can be made.
Participants in this project are:
1. given an opportunity of participation to create or modify questions
which they want to ask to other organisations
2. given feedback along with the project survey result.
Note that the project survey is done anonymously
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Approach
10 steps to the goal
Step 1

Conceive set of benchmark questions

Step 2

Review the questions by some experts

Step 3

Reach out to companies: Target >20 companies

Step 4

Allow the participating companies to modify the questions

Step 5

Finalize the questions and distribute them to the companies

Step 6

Participating companies to return the completed questionnaire

Step 7

Analysis of the answers

Step 8

Compile a report of the exercise and the findings

Step 9

Distribute the report to all of the participating companies

Step 10 Resolve any outstanding issues

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Draft of survey questions

1. Awareness:
1-a1

Is your company aware of current trade secret legislation?

1 Not at all

1-a2

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q1-a1:
Please describe in your own words the laws related to trade secrets.

1-b1
Is your company aware of the requirements for something to qualify as a trade
secret?
1 Not at all

1-b2

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q1-b1:
Please try to describe in your own words those requirements.

Draft of survey questions: Contd

2.Implementation:
2-a1
Does your company have a trade secret policy?
1 Yes

2-a2

2 No

3 I dont know

Only for those who selected Yes in Q2-a1:

Is the policy implemented and followed?
1 Not at all

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

3. Strategy:
3-a1
Does your company have clear criteria to distinguish between keeping something
as a trade secret versus applying for a patent or publishing?
1 Not at all

3-a2

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q3-a1:
Please describe what kind of criteria your company uses in order to decide if
something is kept secret or not.

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Draft of survey questions: Contd

4. Management:
4-a

Accessibility:
Is access to the trade secrets in your company controlled and limited to
appropriate people/departments?
1 Not at all

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

4-b

Protection mechanism:
Does your company use various protection mechanisms (administrative, legal
and/or technical) to secure its trade secrets?
1 Not at all

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

4-c1 Education for employees:

Is there education about trade secrets provide to employees?
1 Not at all

4-c2

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q4-c1:
Please describe the nature of education provided.

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Draft of survey questions: Contd

4. Management:
4-d1 Reward and Recognition program:
Is there a reward and recognition program for employees who create trade
secrets?
1 Yes

4-d2

2 No

3 I dont know

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q4-d1:
What kind of program is it? Is it a monetary program, commendation program or
something else?
Please describe the program in more detail:
e.g. if it is a monetary program, how big and when is it paid?

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Draft of survey questions: Contd

5. Evaluation of trade secrets:
Does your company review and evaluate its trade secrets on a regular basis, for
example to determine their contribution to the business?
1 Not at all

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

6. KPI:
6-a1
Does your company have any KPIs / metrics in use around its trade secret and
trade secret asset management?
1 Not at all

6-a2

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q6-a1:
Please describe what kind of KPIs / metrics are used.

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Draft of survey questions: Contd

7. Open innovation vs. leakage of trade secrets:
Open innovation as innovating in cooperation with outside entities has been emphasized
nowadays, where there is a risk of leakage of trade secrets.
7-a1
Does your company have a balance between embracing open innovation and
managing its trade secrets?
1 Not at all

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

7-a2

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q7-a1:
How does your company reconcile embracing open innovation and managing its
trade secrets? Please describe the ways in which your company achieves the right
balance.

7-b

What is the biggest challenge your company faces in finding this balance?

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Draft of survey questions: Contd

8. Budget:
8-a1
Does your company have an approved budget for managing its trade secrets?
1 Not at all

2 A little bit

3 Moderately

4 Quite a bit

5 Extremely

8-a2

Only for those who selected "Extremely", "Quite a bit" or "Moderately" in Q8-a1:
How big is the budget? Please describe either absolutely or relatively (e.g. % of
overall IP budget, % of overall R&D budget) where you feel comfortable.
9. Finance / Tax
Is your finance and/or tax department within your company interested in any way
in the trade secret assets of your company?
1 Yes

2 No

3 I dont know

9. Free comments
Do you have any additional information to add about trade secret asset
management within your company?

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Timeline
October 2016

November 2016

December 2016

Step 3: Reach out companies

Step 4: Participation of the companies

Step 5: Distribute the questions

Step 6: Answer the questions

Step 7: Conduct an analysis
Step 8: Write a report

Step 9: Distribute the report

Step 10: Resolve issues
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Contact information
Professor Donal O'Connell
CEO, Managing Director of Chawton Innovation Services Ltd
Adjunct Professor, Imperial College London

donal@chawtoninnovationservices.co.uk

Kazuhiro Matsumoto
MBA candidate,
Full-time student of Hong Kong University Science of Technology /
Exchange student of London Business School

kmatsumoto.iep2017@london.edu

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