By Erin Geiger Smith
Feb 22 (Reuters) - Attorneys say they hope stepped-up
efforts by the White House to battle trade-secret theft will
result in greater protection of their clients' intellectual
property and better communication between companies and the
The Obama administration on Wednesday announced a plan to
deal with the growing theft of U.S. trade secrets by China and
other countries. The plan contained few new ideas for dealing
with the threat but instead emphasized tactics such as increased
diplomatic pressure and greater use of trade-policy tools,
improved legislation, better domestic law enforcement and more
James Garland, a white-collar defense and investigations
partner at Covington & Burling, said that the so-called "whole
of government approach" laid out by the administration should
better protect corporate clients' trade secrets in several ways.
He said that the government's commitment to sharing threats
with private companies means that if the government is
investigating a trade-secret theft at one technology company, it
will inform other such companies it believes to be at risk.
Though that does happen on a limited basis now, the new
coordinated effort is designed to make it happen quicker and
with greater frequency, he said.
Companies will also be encouraged by the government's plan
to facilitate sharing of "best practices" to protect trade
While some companies have sophisticated protection methods,
such as carefully limiting the number of employees with access
to trade secrets, many smaller organizations currently think
they can't invest in high-level protection, Garland said.
Garland and other trade-secrets experts cautioned that the
success of the program will depend on how its ideas are
The program also is relatively free of mandates. That could
limit the new initiative's impact, said R. Mark Halligan, a
Nixon Peabody partner and an expert on trade-secrets litigation.
Halligan said he has long been an advocate for the types of
detailed protection programs the government is looking to
facilitate. However, he said, he fears that without a
legislative mandate requiring particular methods of trade-secret
protections, many companies will continue to put off effective
Still, the government's enhanced focus, as well as increased
recognition by the media of trade-secrets cases, could result in
increased pressure on in-house counsel and, in turn, outside
counsel to make sure companies' trade-secret protection methods
are up to speed, Halligan said.
Like Halligan, Cooley partner Michael Klisch said the
government's announced focus will educate the public in a
previously underserved area.
That will help businesses more successfully prosecute
trade-secrets cases, Klisch said, in that jurors will go into
trials understanding why companies have to protect their trade
He said it will be much easier to tell jurors, "We all know
how important these trade secrets are.... I'm here to protect
If Assistant Attorney General Lanny Breuer's comments from
Wednesday's conference come to fruition, jurors will hear about
more criminal trade-secrets allegations as well.
Breuer encouraged businesses to notify prosecutors if they
believe they've been a victim of a trade-secret threat and
promised vigorous investigation and prosecution when
Approaching prosecutors is something companies have been
hesitant to do, said Covington's Garland, a former U.S. Justice
Department attorney. He believes the government has begun to
recognize that it must work with companies to ensure that
reporting trade-secret crimes won't result in bigger headaches
for a company than it already has.
More aggressive prosecutors could also have a downside,
intellectual property litigator Anthony Sammi of Skadden Arps
Slate Meagher & Flom said. "Companies operating in an
innovation-intense industry will be at greater risk of trade
secret theft accusations," he said, "which could now include
substantial criminal penalties."
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