They lose them to the person who sat three desks away.
75% of IP theft is committed by current or former employees. And 34% of employees openly admit they would take company data if they left. That’s not a cybersecurity problem. That’s an operational one.
Here’s what most companies get wrong:
They assume secrecy is enough. It isn’t. Courts require two things to enforce trade secret protection under the Defend Trade Secrets Act. First, the information must derive economic value from not being generally known. Second, and this is where most companies fail, you must demonstrate reasonable efforts to maintain that secrecy.
Sloppy practices destroy legal standing.
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A 2025 Tenth Circuit ruling made this brutally clear. A customer list of 40, 000+ names lost all trade secret protection because it wasn’t marked confidential, wasn’t password-protected, and wasn’t restricted. The court didn’t care about the list’s value. It cared about how it was treated.
Five things every founder should have locked down now:
1. Label everything. Customer lists, pricing models, vendor terms, product roadmaps. If it isn’t marked proprietary, courts won’t treat it that way.
2. Restrict access ruthlessly. Follow the Coca-Cola model: only essential personnel touch sensitive information. Access logs matter in litigation.
3. Execute NDAs before access, not after. Non-disclosure agreements signed after an employee has already seen the data are nearly worthless. Sequence matters.
4. Build an exit protocol. Device retrieval, account deactivation, and a written reminder of confidentiality obligations at every departure. Every time, no exceptions.
5. Encrypt and document. Technical controls are evidence of reasonable effort. Without them, your legal argument evaporates.
The stakes are real. Over 1, 500 federal trade secret cases were filed in 2025, an all-time high. The average award is $4.5 million. But post-breach remedies are expensive, slow, and uncertain. Prevention is the only reliable strategy.
Your customer list, your pricing strategy, your process improvements, they are assets. Treat them like ones.
