Customers and employees leave while you are suspecting a leak of company secrets. What can you as an organization do to prevent the damage?

Trade secrets and other important information are an important resource for organizations today. In order for something to count as a trade secret in the sense of the law, the information must be about business or operational relationships that are kept secret and that cause harm to the company if the information is disclosed or becomes available to external partners.

A misappropriation of trade secrets can be costly and, in the worst case, lead to the closure of your own business. It can therefore be crucial how to act in case of suspicion of an attack or a leak.

Protecting yourself in the event of a leak – act both short and long term

When the company notices that its trade secrets have been attacked, the situation is usually already a fact. Customers leave, employees resign – and the company is left with its fixed costs. A first step is to get an overview of the situation.

With the help of IT forensic expertise, it is possible to map current and former employees’ activities, such as email conversations, document management, connected USB sticks and whether the computer has been connected to external servers. The overview makes it possible to assess the extent of the intrusion and leakage, as well as what should be prioritized during the collection of evidence. An experienced counsel can also see which issues may become later problems, or which parts of the evidence gathering should be handled with particular care.

Apply for an intrusion investigation

If the trade secret also constitutes a copyright-protected work, the company can apply for a so-called intrusion investigation under the Copyright Act. An intrusion investigation is equivalent to a search or a dawn raid and serves as a civil law evidentiary security measure. The purpose of the intrusion investigation is to safeguard the applicant’s copyright and prevent its exploitation. It is the district court that, on application from the rights holder, decides whether an intrusion investigation should take place. It is then the Swedish Enforcement Authority that executes the decision.

In order for the district court to make an intrusion investigation, the applicant must prove that it is reasonably believed that the other party has infringed a copyright that belongs to the applicant. The documents sought must also be presumed to be relevant to the investigation of the infringement. In addition, the reasons for the intrusion investigation must outweigh the inconvenience that the measure causes to the opposing party, i.e. that a proportionality assessment must be carried out. Finally, the applicant must provide security for the potential damage suffered by the counterparty, usually in the form of a bank guarantee.

Reduce the harmful effects of the attack

The next phase is about reducing the harmful effects of the attack. Although there is the possibility of demanding contractual penalties or damages from the attacker, it does not help the company here and now. Neither damages nor contractual penalties are paid voluntarily, in which case it is usually necessary to initiate legal proceedings that can take several months or years. If the company’s finances bleed within months, it does not matter that you have guaranteed damages within a couple of years.

Instead, the top priority must be to ‘stop the bleeding’, that is, to prevent the attacker from continuing to misuse trade secrets in the short term in the course of his business. This can be done by means of an interim penalty injunction.

A person who has attacked a trade secret may be prohibited by the district court from using or disclosing the trade secret under penalty of fine. An injunction application should be made on an interim basis, that is to say, the prohibition should remain in force until the court has made a final decision. The applicant must then show that there is probable cause that the trade secret has been attacked and there is a reasonable fear that by continuing the attack the defendant will detract from the value of the trade secret. A corresponding possibility for copyright-protected works can be found in the Copyright Act.

Dealing with theft of trade secrets is about working in both the short and long term at the same time. In the short term, the measures concern the gathering of evidence and the interim prohibition (with fines). In the long term, the measures are aimed at cost recovery in the form of claims for damages.