Safeguarding Intellectual Property

Minnesota businesses can take multiple steps to prevent ex-employees from using and transferring key company information.

The term “intellectual property” covers a lot of ground—patents, trademarks and trade secrets.

Intellectual property theft could occur any time an employee leaves any company, on good or bad terms.

A number of factors can contribute to the likelihood that a company will fall victim to intellectual property theft, and particularly to losing trade secrets.

An important Minnesota case from 1983 is Electro-Craft Corp. v. Controlled Motion Inc. An employee of motor manufacturer Electro-Craft left to start a competing company, Controlled Motion. Controlled Motion began making motors similar but not identical to those made by Electro-Craft.

The Minnesota Supreme Court ruled that Electro-Craft had failed to sufficiently protect its trade secrets. Security measures at its plants were lax. Employees were not required to wear identification badges. Drawings and plans for the motors were neither locked away nor kept in a central location.

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