Trade Secrets Theft

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trade secrets of organizations or companies are protected since they provide a competitive advantage over competitors (Quinto & Singer, 2012). The theft and exposure of the Internet Operating System source-code of Cisco Systems Incorporated in 2004 put the company at the risk of having the source-code known to its competitors, thereby losing its competitive advantage in the market (Dhillon, 2007). Exposure of a trade secret to competitors implies that they can reproduce the source-code and improve on weak areas to produce a superior source- code. Cisco would be at a risk of losing their consumers who would buy the better product in the market. Formation of the internet on Cisco infrastructure means that the hackers might have had an opportunity to manipulate and alter how the internet functions.

Chinese cyber espionage has been blamed for the trade-secret theft in the United States with companies such as Ford, Motorola, and General Motors being victims (Palmer, 2013). In a lawsuit involving the Kolon Industries Incorporated and Du Pont De Nemours and Company, Kolon was accused of stealing Du Pont’s trade secrets to gain a competitive advantage in the para-aramid fibers market in the United States (DuPont News, 2011). Kolon argued that their conduct was necessitated by the Du Pont’s attempts to monopolize the fibers industry and lock out competition. Du Pont won the case received compensation from Kolon which had been found to have acted maliciously and willfully by the jury. Any company whose trade secrets are

stolen is at a risk of losing efficiencies, competitive advantage, market position, and returns from research and development investment.





The advance in technology has enabled hackers to access trade secrets from the comfort of their houses through Internet. Companies, which provide their information to the cloud, are vulnerable to cyber attacks and theft of trade secrets. Some employees may also participate in the theft of trade secrets if there is a promise for huge reward by a competitor. Companies should seek the help of computer systems experts to safeguard their data and information. Cultivation of a culture of loyalty to the company among employees should be promoted.


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