Most of us work in companies that have methods for manufacturing products or processes, which we have developed, that differentiate us from the competition. These may or may not include patents and copyrights. When these processes are not revealed in public disclosures such as patents or copyrights, they are kept as company “Trade Secrets.” The most famous of these is, of course, the formula for Coca-Cola. It has been protected from public disclosure for nearly 100 years by hiding the formula in a vault with only very limited access.
So how do you protect your trade secrets when access to the information is needed by numerous operating personnel in performance of their jobs? This is a critical management function to ensure the safety of this information. Competitors can reverse engineer nearly any product these days and produce an “almost” exact duplicate. However, your own development of the product probably found that a slight tolerance variation in one or two key elements of the design was the difference between success and failure. This is now your trade secret and needs to be protected.
Several years ago we set up a sales representative in China. In China, copying products is a way of life without regard to contracts or normal business practices. Sure enough, within the first year of our contract, copies were being made. Fortunately, we found out about it through one of their employees and cancelled the contract. After setting up our own sales organization, we heard from one of our customers that one of our products was not working in a major process line and causing much damage. Upon investigation, we found that the product did not have our markings and was one of the counterfeit models. The forger had missed one of the key design features in the form of a key tolerance, which prevented the proper operation.
So how do you protect that feature? Well, here’s how not to. In the U.S., we had a customer who hired one of my engineers in order to make the product for his own use. Over the course of the years in doing business with this customer, our engineering department had sent the customer outline sales drawings for their use in adapting the product to their equipment. These drawings were done in a CAD format. In such a format, layers of design details are overlaid upon each other to get the final assembly. The final assembly can be configured to omit the underlying details and show only the finished outside dimensions. Such a drawing can be used for sales purposes.
However, such a drawing - if sent electronically - can also be deconstructed to reveal all the underlying details, including the part with the very critical tolerance dimensions!
More on this next week.
Company Trade Secrets
By Jack Marino
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