Date 19 July 2006
Since 1886, Coca Cola’s famous ‘secret recipe’ has helped it to retain a dominant position in the worldwide soft drinks market. It has also served as textbook proof of how carefully protected know-how can help a business to flourish. Coca Cola’s staff members have been instrumental to creating this legend, with an almost reverent treatment of the secret. That is, until now.
Three members of Coca Cola’s staff have recently been arrested on charges of fraud and the unlawful acquisition of ‘trade secrets’. One is an administrative assistant who has been specifically charged with the stealing of corporate files. The motivation appears to be the opportunity to sell the information to Coke’s main rival, Pepsi.
Whereas the term ‘trade secrets’ to describe the documents in question may be veering towards sensational journalism, the case has reminded businesses about the dangers of corporate espionage – particularly when the threat comes from within the organisation.
Businesses with distinct or unique products and services have often arrived at them through costly research, development and the accumulation of specific know-how. If obtained by a competitor, these valuable business assets could potentially destroy any competitive advantage held by the organisation that developed them.
Secure storage of confidential information and sensitive data is common sense. So too is the shredding of unwanted documentation to prevent competitors and other interested parties from discovering it whilst going through your rubbish – it happens!
However, of equal importance is ensuring that only the employees who require information of this kind are the ones with access to it. Clear confidentiality policies written into service agreements, employment contracts and employee manuals are also a strong deterrent – as are occasional reminders to all staff about the use and disclosure of confidential information.
If creating intellectual property is part of your service offering then such information should be handled carefully, particularly with regard to its display when visitors are in on the premises. Appropriate security measures do not have to be complicated or onerous. A simple visitor protocol may be all that is required to protect your valuable business assets.
Certainly in the Coca Cola case, the sale value of the information was enough to lure some of their employees to allegedly steal know-how and we await the outcome with great interest. Pepsi are currently denying any involvement and are co-operating fully with the investigation. Meanwhile, Coca Cola Chief Executive Neville Isdell has sent a reminder to all staff about their responsibility to protect ‘trade secrets’.
For advice on protecting know-how, confidential information, trade secrets or intellectual property generally, please contact Peter Goodman at peter.goodman@salaw.com or on 01727 798014.
© SA LAW 2006
Every care is taken in the preparation of our articles. However, no responsibility can be accepted to any person who acts on the basis of information contained in them. You are recommended to obtain specific advice in respect of individual cases.