Last week, I told you how a customer had been given CAD drawings that had been electronically transmitted and could be deconstructed to show all the underlying details, including the critical tolerances of one of the key components. That company had also hired one of our engineers to assist them in building our product for their own use.

When we saw their finished product, we were shocked to see it was nearly an identical copy of our product. Our suspicions were aroused. A search of the former employee’s computer revealed that he had downloaded many of the key drawings of our design to his laptop. We knew of no reason he had needed these, so we got an injunction from the courts to have the other company reveal what was on his computer in their building. Sure enough, our drawings showed up in their shop!

Open and shut case you’d figure.

We filed a lawsuit that was legally finagled to be heard as a jury trial in their district court, which was in a very southern city. Our company was in the north. Shouldn’t be a problem in the 21st century you’d think. Our corporate lawyers were from “K” street in Washington, DC., the very best.

Without going into any of the gory details, a key defense presentation was a showing of our drawings sent to the customer by our engineering department deconstructed to show every detail of our design! The stolen drawings were a moot point – we had GIVEN them everything they needed. The jury was all local and one could sense they did not appreciate our big-time Washington attorneys.

After spending over $1 million and months of key personnel’s time, we lost. Basically, we had not protected our own trade secrets.

A company needs to identify what its trade secrets truly are and have written guidelines on how these are to be protected. All employees who come into contact with these items need to be made aware of them and the proper handling of these items. Trade secrets that can’t be reproduced from reverse engineering are better than patents ... and cheaper. Once you have written a patent, you have revealed much of your technology, and all a copier has to do is figure out how to get all of your results using a slightly modified approach to avoid your patent.

This is almost always possible unless your patent protects the very basic foundation of the technology. That is a hard thing to do in this day and age.