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...Fitzpatrick Burke, 2001). To facilitate their assessment activities, CI practitioners often attempt to secure information on the strategic capabilities, intellectual properties, product formulations, technological processes, business plans, and potential threats posed by competitors to their employers (Kahaner, 1996; Wright and Roy, 1999; Fitzpatrick, 2000). Advance knowledge of these types of competitor trade secrets enhances their client's competitiveness while eroding that of rivals (Fitzpatrick and Burke, 2001).
CI practitioners have identified a number of resources and techniques for ferreting out information pertaining to competitor trade secrets. These techniques are represented by basic/archival and creative competitive intelligence methodologies. With the passage of the Economic Espionage Act (EEA) of 1996 and adoption of various codes of conduct for CI professionals (Fuld, 1995; Trevino and Weaver, 1997; SCIP, 2002), many creative methodologies have come under increased legal and ethical scrutiny. The purpose of this paper is to review some of the legal and ethical issues associated with the use of these latter methodologies, and also to present a model that seeks to ameliorate some of the ethical and legal abuses of creative methodologies used by CI practitioners.
Trade Secrets and the Law
The Uniform Trade Secrets Act of 1985 (UTSA) and the EEA (1996) attempted to codify the nature of trade secrets and develop legal parameters for organizations wishing to secure legal protections for their trade secrets. Unlike patents, trade secrets derive their competitive value from not being readily ascertainable by others (Fitzpatrick, DiLullo and Burke, 2002). Therefore, to establish trade secret status for proprietary information, business plans, intellectual properties, business processes, or technologies, firms must establish procedures designed to reasonably protect their trade secrets. These protective measures can include:
(a) advising employees that certain organizational information, processes and/or technologies have been assigned a trade secret designation; (b) limiting trade secret access to those persons with a legitimate need to know; (c) requiring persons with access to trade secrets to sign confidentiality agreements; (d) installing a variety of electro-mechanical and other physical security devices (e.g., locked cabinets, safes, alarms, electronic sensors, security personnel etc.); (e) conspicuously marking proprietary information as confidential; and (f) developing corporate security policies that screen external speeches and publications by organizational personnel for the disclosure of trade secrets or proprietary information [Van Arnam, 2001; Religion Technology Center v. Netcom On-line Communication Services, 1995; Fink, 2002] (Fitzpatrick, DiLullo and Burke, 2002: 208-209).
Both the UTSA and EEA maintain similar legal criteria for determining if trade secrets have been stolen or misappropriated. In general, corporate espionage or trade secret piracy is said to occur whenever an individual or corporation" (1) steals, or without authorization appropriates, takes, carries away, or controls, or by fraud, artifice, or deception obtains such information; (2) without authorization copies, duplicates, sketches, draws, photographs, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information; [and] (3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization ..." (EEA, 1996:1832). The EEA imposes significant criminal penalties for theft or misappropriation of trade secrets. Organizations convicted of acts of economic espionage or trade secret piracy are subject to a $5 million fine. Individuals convicted of these actions are subject to 10 years imprisonment and a $500,000 fine. However, it should be noted that legal protections for trade secrets expire when (a) organizations fail to take reasonable steps to protect their secrecy; or (b) substantive information about the trade secret has been publicly released or disseminated (Mann and Roberts, 2000).
Ethical Standards for the Acquisition of Trade Secrets
To facilitate compliance with existing legislation, the CI community has sought to articulate professional codes of conduct governing the acquisition of information on competitor trade secrets (Fuld, 1995; Paine, 1991; Trevino and Weaver, 1997; SCIP, 2002). Ethical standards advanced by Fuld (1995), Paine (1991), Trevino and Weaver (1997) are representative of these codes of conduct. Fuld (1995) has developed a series of moral and ethical commandments for CI practitioners seeking competitor trade secrets, which have also been embodied in the SCIP (Society for Competitive Intelligence Professionals) code for CI practitioners (SCIP, 2002). When eliciting trade secret information, Fuld maintains that CI operatives shall not: (a) bribe the employees or personnel of competitors; (b) plant eavesdropping devices; (c) steal trade secrets or hire the employees of competitors for purposes of learning their trade secrets; (d) coerce other persons into revealing trade secret information by jeopardizing their jobs or reputation; or (e) gain access to information through misrepresentation or by intentionally misleading potential informants in interview studies. Misrepresentation can occur through acts of both commission and omission (Trevino and Weaver, 1997). Commission occurs when CI operatives deliberately misrepresent their identity, client sponsorship, or intent (Trevino and Weaver, 1997). This is exemplified by CI operatives who ferret out competitive information or trade secrets by assuming the roles of students, private research firms, or potential suppliers or business partners (Paine, 1991). Based on the results of an interview study, Trevino and Weaver (1997) report that most CI practitioners believe that acts of commission constitute unprofessional or unethical behavior while acts of omission are subject to greater ethical latitude or tolerance. Acts of omission occur when CI practitioners do not voluntarily disclose their motivations or client sponsorship. Therefore, many CI professionals apparently believe that unless their motives or client sponsorship is specifically questioned by potential informants, a didn't ask/won't tell code of behavior is justifiable.
Sources, Legality and...
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