Trade Secrets and Collaborators: Sharing Knowledge with Advertising Agencies

By Erickson, G. Scott; Rothberg, Helen N. et al. | Competition Forum, July 1, 2006 | Go to article overview

Trade Secrets and Collaborators: Sharing Knowledge with Advertising Agencies


Erickson, G. Scott, Rothberg, Helen N., Wilcox, Shannon, Competition Forum


EXECUTIVE SUMMARY

This paper considers a specific application of Knowledge Management, the implications of sharing trade secrets or other proprietary information with marketing communication collaborators such as advertising agencies. The legal status of trade secrets, the role of collaborators and their employees in employing and protecting these secrets, and the likely impact of two recent cases involving these topics are explored.

Keywords: Knowledge Management, Trade Secrets, Collaboration, Advertising Agencies,

BACKGROUND

Knowledge management (KM) is an increasingly important discipline. As organizations recognize that sustainable competitive advantage in the 21st century is based on the knowledge and abilities of employees as opposed to capital investments or generic information technology solutions, leveraging the unique knowledge of individuals within the firm becomes increasingly critical to establishing unique points of differentiation. This paper focuses on protecting the critical, unique knowledge of a firm. In particular, it looks at controlling knowledge that must be shared with collaborators if it is to be effectively employed. Integrated marketing communications (IMC) requires sharing deep knowledge with communication partners such as advertising agencies. In particular, marketing research, customer/consumer data, strategic plans, and marketing tactics must be passed on to collaborators if the latter are to communicate with targeted market segments. How does a core firm share such knowledge while still maintaining control of it? By definition, advertising agencies and other IMC partners are external to the central organization. Can the core firm take steps to better insure such knowledge remains proprietary even as it is spread throughout its collaborator network? This question is particularly important as advances in the web and information technology have made knowledge sharing not only easy but a matter of course. The key is distinguishing between different types of knowledge and information/data, then managing appropriately. In particular, a firm must designate knowledge as proprietary by the appropriate means, then take steps to keep it so if it intends to defend it. Given the need to both share and protect, this process is not necessarily easy.

INTELLECTUAL CAPITAL AND TRADE SECRETS

Knowledge can fit a number of definitions. Intellectual property (characterized by patents, copyrights, trademarks) has been formally defined and is generally related to high technology. IF an invention, it must be novel, useful, and non-obvious, thus it is usually only true inventions that fit the definition. Intellectual capital (IC) is the term coined to include not only intellectual property but also "softer" knowledge assets of the firm that fail to fit the "harder" knowledge definition of intellectual property. IC can range from the tacit know-how of individual employees to designated trade secrets. Intellectual property is an easy topic (though actually defending such in court can be troublesome). You discover the new technology or new design, take the legal steps necessary to protect it, then remain vigilant for unauthorized usage or piracy. Intellectual capital is more difficult as the type of knowledge covered by statute is fuzzier as are the protection mechanisms. The problem becomes particularly sticky as issues such as electronic storage and distribution as well as sharing between organizations are brought into the picture. This paper focuses specifically on intellectual capital designated as trade secrets and aspects of sharing such knowledge assets with marketing collaborators such as advertising agencies.

Trade secret law is a particularly interesting area in the United States in that is has traditionally been left to states to define and enforce. The variety of state statutes and interpretations, however, eventually led to the Universal Trade secrets Agreement (UTSA) to which the vast majority of states subscribed. …

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