Apple ex-employee bites into its trade secrets

A former employee of Apple, Xialong Zhang, has been charged with the theft of Apple’s confidential information and trade secrets and faces up to 10 years imprisonment and a fine of $250,000.

Zhang downloaded the Apple’s 25-page blueprint of its self-driving start-up car, but shortly after he was arrested at San Jose Airport where he travelling to China to work for another company, Xiopeng Motors. Whilst being questioned by Apple, Zhang admitted to Airdropping copious amounts of documents onto his wife’s laptop to have continued access to them.

For any business, a key concern is the confidential information and trade secrets that is it makes available to its trusted employees and what, if anything, it can do to prevent misuse of confidential information and trade secrets (particularly after employees have moved on to new employment). Another key question for any business is, what constitutes confidential information and trade secrets and how can they be protected?

Briffa comment:

On 9 June 2018, the UK implemented the Trade Secrets (Enforcement) Regulations 2018 which will also align with EU law even after Brexit. We now have a clear definition of a trade secret.

A trade secret is:

• a secret that is not generally known or readily accessible to persons within the circles that normally deal with this kind of information;
• has commercial value because it is a secret;
• has been subject to reasonable steps by the person lawfully in control of the information to keep it a secret.

The owner of the confidential information constituting a trade secret (i.e. the ‘trade secret holder’) has six years from the time they become aware of the unlawful disclosure of the information to issue a claim.

It’s possible to gain additional contractual protection for confidential information and trade secrets by entering into a non-disclosure agreement or confidentiality agreement prior to the disclosure of any trade secrets or other confidential information.

It is always advisable to obtain a non-disclosure agreement or confidentiality agreement before any confidential information is disclosed if possible. These agreements provide companies with an additional cause of action (i.e. breach of a contract claim, in addition to a statutory claim) in circumstances where a trade secret or other confidential information is unlawfully disclosed.

The presence of a contract dealing specifically with trade secrets and other confidential information also makes a powerful statement to employees that companies take the protection of their trade secrets and other confidential information seriously and the they are willing to take legal action if necessary to enforce their rights and protect their valuable information.

At Briffa, we help people to identify and protect the valuable intellectual property assets in their businesses (including their trade secrets and confidential information). We regularly prepare and negotiate bespoke non-disclosure agreements and confidentiality agreements which we tailor suit our clients’ specific needs. If you have any queries, please do not hesitate to get in touch. We offer free 30-minute consultations to all new contacts.