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Continuing case shows the importance of protecting trade secrets

For months now, national news has been covering stories regarding Huawei, a large Chinese tech company, that has been accused of stealing trade secrets from CNEX. The story has been developing since 2017, with accusations going back and forth and businesses paying the price.

This is a complicated international situation that many New Jersey business owners are likely relieved that they do not have to worry about. But this case sheds light on some of the complex matters that any business could face when trying to protect their trade secrets.

What are the details about Huawei v. CNEX?

There are many layers to the case involving the two tech giants—including governmental actions—but there are two crucial details that stand out:

  1. CNEX claims that the chairman of Huawei pretended to be a customer to collect and use their trade secrets. And according to CNBC News, they also allege that Huawei misappropriated those trade secrets.
  2. On the other hand, Huawei claims that one of their past employees stole their trade secrets and then used them to create CNEX.

Both companies deny the claims against them.

Companies should not be worried, but they should always be cautious

Fortunately, these kinds of situations are not too common. New Jersey companies have a variety of federal protections they can rely on, including:

However, no company should take these protections for granted. As the recent case shows, those laws can only go so far to protect trade secrets. 

How can companies better protect their trade secrets?

The case between Huawei and CNEX highlights just how complex and time-consuming trade secret disputes can be. And no company wants to deal with the damages of losing trade secrets or handle expensive legal matters to recover those damages.

The good news is, there are several measures that companies can take to protect their trade secrets, including:

  • Carefully labeling and monitoring confidential information
  • Ensuring the secure storage of trade secrets
  • Creating comprehensive non-disclosure agreements
  • Training employees properly 
  • Implementing extra security measures on company computers
  • Developing strategies for how to handle trade secrets with vendors and third-parties

Even though it is unlikely for most companies to experience threats to their trade secrets that are as large as this case, there is no harm in establishing safeguards for the trade secrets that so many businesses depend on for success.

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