Investment firms don’t usually own patents, but all have vast treasures of trade secrets that define intellectual property assets.  While a detailed discussion of trade secret law is beyond the scope of this article, suffice it to say that should trade secrets be stolen there will be competitive and financial pain incurred.

For an investment firm, its trade secrets include, but are not limited to, customer lists, client histories, due diligence processes, investment evaluations, portfolio designs, business plans, pricing tactics, and service methodologies, Unlike patents that have a fixed life of twenty years before accessible in the public domain, a trade secret never loses its special, proprietary status as long it is treated as a secret.

A common scenario is an ex-employee – relationship manager, client service representative, portfolio manager, investment analyst — forms either a competing firm or joins an existing competitor and uses the former employer’s trade secrets to his or her advantage.  The courts are very clear that such an advantage is improper (a misappropriation) if the former employer treated the stolen information as secrets.

The “if” in the previous sentence is key.  The former employer has a direct line to temporary and permanent legal recourse in the presence of a trade secret protection (TSP) program (and little recourse in the absence of one).  A TSP program comprises various activities the firm uses to establish its proprietary and valuable information.  Typical activities are signed confidentiality agreements, an inventory of the firm’s secrets, password protected files, the word “confidential” or something similarly affixed to printed or electronic materials, the practice of locking file cabinets and desks, new employee orientation meetings, annual employee trade secret update meetings, visitor logs, and departing employee exit interviews.

ProTrak leads the industry in providing our clients with powerful capabilities that deliver highly valuable evidence should your firm encounter trade secret misappropriation.

A core resource is ProTrak’s TSP workflow (please contact our service team for our “Feature Focus” training session and materials).  This workflow structure guides each client in creating a TSP program in which the resulting activities define clear evidence that the firm’s information is secret and treated as such.  Next, and wholly unique to ProTrak, is an audit function that identifies if any employee at any time takes a data dump and its contents (e.g. client/prospect lists, notes, reports, etc.) as a printed report, an export file, or e-mail to Outlook.

Certainly, no company likes to contemplate an employee leaving with underhanded motives, but it happens with regularity to large and small firms alike.  With ProTrak, our TSP program resources will deliver essential evidence to the former employee and/or the new employer that legal action will result without remedies (i.e. conveyed in a “cease and desist” letter).  This evidence package often gives a court the necessary evidence to issue a temporary injunction.

The ProTrak evidence package, an attorney letter, and a temporary injunction filing routinely blunt the misappropriation.  At this juncture, the trade secret owner eliminates the use of stolen information and saves significant litigation costs.  This cost avoidance accrues to ProTrak’s ROI as a clear differentiator arising from our deep knowledge of the high-end investment industry.

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