NCR In Row with Former Exec Over Trade Secrets

In my usual morning perusal of news items, I ran across this post from The Bellwether Daily, a blog that proclaims itself the source of "Midwest news they seem to lose," "they" being the mainstream news media. In it, blogger Bill Sloat describes a lawsuit Dayton, Ohio-based NCR has filed against a former employee, now at Hewlett-Packard, around trade secrets. NCR maintains that the ex-vice president of the company who left NCR for HP intends to leak information pertaining to the ATM giant's financial services practice and other key areas.In some cases, this data was related to projects in which HP was directly competing with NCR. Now NCR is seeking a preliminary injunction in Dayton federal court to bar the former executive from revealing these trade secrets to her new employer.

NCR claims the former exec downloaded sensitive documents off her NCR computer to multiple removable storage devices as she was set to change jobs. According to the article, earlier this month, U.S. District Judge Thomas M. Rose granted a temporary restraining order that restricts some business-related activities by Diane Warner, the executive at the heart of the controversy.

This situation speaks directly to a piece I wrote that will run in our April issue on patents and intellectual property. In it, I speak to a variety of sources, including patent lawyers from some top firms, about the issues that financial institutions face when it comes to not only applying for and defending patents, but also in protecting their intellectual property/trade secrets.

It turns out there are actually a variety of technology measures that companies can implement to monitor the flow of sensitive information in and out of their system. In this case, "sensitive information" refers not necessarily to customers' data (Social Security numbers, etc.), but to things like banks' business strategies and proprietary technologies. However, all the experts I spoke to seemed to agree that the No. 1 measure that banks and others need to take to protect their secrets are non-compete/confidentiality agreements. These should be applied not only to the developers who are usually responsible for "inventing" the banks' in-house applications, but also to the executives who are involved in business strategizing and product development. This, say the attorneys I spoke with, should be done during the on-boarding process so that the new employee has a clear understanding of what belongs to the company.

This is simply a best practice for any business. However, one attorney indicated that companies have to also remember to periodically update these non-compete agreements in order to have a more solid defense against information leakage.

Of course, nothing ever protects 100 percent, and this is especially true of that knowledge we contain in our minds. Contrary to what the spy movies tell us, there's no erasing what's in the brain.