Industrial espionage: scale and responsibility

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Employees are often a resource. Sometimes a real threath. The number of illegal acts committed by employees against former or actual employers is growing and yet only few companies, especially among SMEs in EU are actually evaluating the risk associated with industrial espionage and cyber-theft of trade secrets by their employees.

Trade secrets are defined as valuable knowledge and information that companies treat as confidential, relying on it as a fundamental asset for their market competitive advantage. In Italy, Legislative decree 63/2018, which introduced significant changes in the protection of industrial secrets from a civil and criminal point of view, support stakeholders and SMEs who had grasped the importance of protecting their data, now more then ever. But, what are the changes made and what does the law establish? First of all, the decree has modified article 99 of the Italian industrial property code, expressly qualifying as illegal not only the conduct of the person who illegitimately steals trade secrets, but introducing third party responsibilities, referring to the entity that receive and use the information. The entity therefore became equally responsible if the latter knows the illegal origin of the information stolen.

Economic impacts are proportionate to the value of the information and data stolen. Losing information or data of significant value can have a direct impact on turnover and can even lead to bankruptcy.

An actual example: a worker starts a new collaboration with a new employer and spreads and uses confidential information learned during the previous experience. At this point the responsibility is obviously on the worker, but it also falls on the new employer who uses these notions and confidential data to gain competitive and economic advantage.

According to the changes made to Article 623 of the Criminal Code, anyone who chooses to use this information for their own or others' profit will also be sanctioned. The amendments to the law therefore represent a new form of protection for companies which in any case are responsible for operating in such a way as to protect customers' sensitive data together with their trade secrets. Just think that; in the event of legal proceedings relating to the acquisition, use or unlawful disclosure of trade secrets; the judge considers, among other things, the measures taken by the legitimate holder to protect trade secrets.

So what must the company do to protect itself? Companies can suffer substantial value depreciation if it becomes public that they have been hacked, including lost value of customer relationships, loss of contracts, and devaluation of trade name.

It is necessary to intervene on the mechanisms for classifying the level of secrecy of documents, updating internal processes and regulating the use of IT tools by collaborators. Furthermore, with regard to the customers sensitive data management, it is increasingly important to intervene on corporate software usage to make it fully compatible with the new GDPR regulation.

When it is necessary to manage particularly sensitive information, the company can finally adopt specific internal policies in accordance with article 4 of the Workers' Statute. The employer is allowed, within the terms established by law, to control the use of company computers, e-mail and cell phones used by employees, as tools where sensitive data transits. Employers can also develop confidentiality agreements with specific penal clauses with its collaborators or employees in order to better protect confidential information.

Employers can and sometimes must foster the use of common cybersecurity standards and assessment frameworks and toolkits in cooperation with the legislators, in order to implement mid- and long-term policies, as well as practical solutions able to mitigate cyber-theft of trade secrets and the subsequent serious impacts on European businesses. This requires a synergic and coordinated effort also at international level, given the cross-border dimension of the problem.

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Industrial espionage: scale and responsibility

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Industrial espionage: scale and responsibility

Innovazioni Tecnologiche S.R.L.

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