Trade secrets are the core of many companies’ competitive edge, formulas, processes, customer lists, pricing strategies, and proprietary tools that drive real value. They may not be patented, but they’re protected by law.
And once they walk out the door, it’s rarely a clean fix.
Trade secret theft is often committed by insiders: employees, contractors, or business partners who had legitimate access at one point. Whether the motive is profit, leverage, revenge, or recruitment by a competitor, the impact can be immediate and lasting, especially if detection is delayed or mishandled.
What Counts as a Trade Secret?
Legally, a trade secret is any confidential business information that:
- Derives independent economic value from not being generally known
- Isn’t easily reverse-engineered or publicly available
- Is subject to reasonable efforts to maintain secrecy
That could include:
- Product designs and engineering specs
- Customer and vendor lists
- Internal financials or margin structures
- Software code or proprietary algorithms
- Marketing strategies and product launch plans
- Operational workflows or pricing formulas
If it’s something you wouldn’t want in a competitor’s hands it likely qualifies.
How Trade Secrets Are Stolen
Trade secret theft doesn’t always involve hacking or corporate espionage. In fact, it’s often subtle:
- A departing employee forwarding files to a personal email
- Cloud sync tools quietly backing up confidential folders
- Portable drives used just before resignation
- Screenshots, photos, or printed reports taken without authorization
- Collaboration with outside parties while still employed
And it doesn’t always stop when the employee leaves. The real damage often comes when the stolen information is used in a new role, startup, or competing bid.
Warning Signs to Watch For
Trade secret theft is often uncovered after the fact: during litigation, a sudden loss of business, or tipoffs from former colleagues. But early indicators may include:
- Employees downloading or accessing unusual volumes of files
- Activity on non-company devices or personal cloud accounts
- Changes in behavior after resignation notice
- “Scraping” of internal tools, directories, or pricing documents
- Suspicious timing around interviews, competitor contact, or side projects
Having monitoring tools in place and knowing how to read digital activity logs can make all the difference.
What to Do If You Suspect Theft
Speed and discretion are critical. Accusations made without evidence can backfire, while waiting too long can give the individual time to cover their tracks or use the information elsewhere.
Here’s what typically works:
- Preserve evidence immediately and don’t allow devices to be wiped or reassigned.
- Engage digital forensics to review access logs, device activity, and file movements.
- Interview tactfully but only after the evidence supports it.
- Involve legal counsel early to guide communication, NDAs, cease-and-desist letters, or potential civil claims.
- Liaise with law enforcement where criminal theft or breach of fiduciary duty may apply.
How Swailes Helps
Swailes supports clients at every stage of a trade secret concern from proactive safeguards to reactive investigations. Our services include:
- Discreet monitoring of user behavior and file access
- Forensic analysis of devices, email, and cloud activity
- Background research on suspect affiliations and competitor contact
- Chain-of-custody documentation for legal use
- Liaison with legal counsel and, when needed, law enforcement
Every case is different but what they share is urgency, sensitivity, and the need for clear evidence.
If you’re concerned about protecting your confidential information or need help responding to a suspected incident, Swailes offers the experience and discretion to help you move forward with confidence. Our team is ready to support you wherever you are in the process.