BFV Perspectives, BFV Videos, Noncompete & Trade Secrets, | Jun 26, 2019

Protecting Trade Secrets in a Coworking Space

Coworking space, like those operated by WeWork, Roam and Industrious, have enjoyed explosive growth over the past decade. Start-ups, freelancers and established companies alike are drawn to these spaces because of their innovative office designs and collaborative environments. The success of coworking space is a testament to the numerous advantages they offer, but, like most major innovations, they also raise various legal questions. One key legal question is the protection of trade secrets.  Companies that have workers in a highly collaborative coworking space face several unique challenges in protecting their sensitive company information.

Physical security is one of the biggest challenges faced by coworking businesses. A coworking space typically utilizes open-office designs, publicly accessible desks, and shared spaces. Keeping information private in this open environment is much more challenging than in a traditional office space. The push for flexible employment options is another challenge faced by companies that rely on coworkers. While often touted as a benefit of coworking, short-term business and employment relationships can present opportunities for theft of company information. Finally, coworkers face challenges to privacy presented by shared networks and publicly accessible Wi-Fi.

To overcome some of these challenges to protecting sensitive information in a coworking space, businesses ought to consider the following tips:

  1. Consider what valuable information you need to protect

Sometimes, business owners are unaware of just how much protectible information they possess. Broadly speaking, trade secret law may protect information that provides your business with a competitive advantage because others are not privy to that information. This broad definition can cover a wide range of company information, from customer lists to innovative developments. So, before you do anything else, contemplate what information you need to protect.

  1. Be conscious of who’s listening

One of the hallmarks of coworking space is the open-office workspace. While the open-office concept is a great way to encourage collaboration, it is also an eavesdropper’s paradise. For information to qualify as a trade secret, you must take reasonable efforts to protect the information. So, before you tell your employees about your next big idea, it may be worth doing a quick 360° to see who might be listening in on your conversation.

  1. Protect your sensitive documents

Using publicly accessible printers and “hot desks” are great ways to keep overhead low, but they also can present challenges to keeping private documents, well, private. You don’t have to spring for an expensive office suite or personal printer, but you should make an effort to maintain physical control over sensitive company documents at all times.

  1. Don’t openly display your computer screen

It’s tough to hide anything in a place that prides itself on having as few walls as possible. However, you should take reasonable efforts to ensure no one can see the sensitive information on your workers’ computers. Taking precautions like making sure they lock their screens while they are away from their desks and not displaying their devices to people who are not affiliated with the business can go a long way in protecting your information.

  1. Be wary of allowing others to use your company devices

A collaborative workspace is one of the biggest draws that coworking space has to offer. In this highly collaborative environment, it may feel completely natural to let a friend borrow your phone to make a call or to loan your USB drive for a presentation. While your generous nature is laudable, consider that by allowing others to use your devices, you may be giving them access to the sensitive company information stored on the device.

  1. Understand the risks of using publicly accessible Wi-Fi

In an age where the internet is practically essential to conduct any business, it’s no surprise that most coworking spaces offer publicly available Wi-Fi to entrepreneurs. Though many coworking spaces take steps to protect Wi-Fi users, business owners should be aware that using publicly accessible Wi-Fi carries risks of “man-in-the-middle” attacks. During these attacks, nefarious individuals can read transmissions of data from your computer over publicly accessible Wi-Fi. Considering this risk, you may want to refrain from transmitting valuable company information over publicly accessible Wi-Fi.

  1. Beware of the departing employee

Another benefit of coworking space is that it gives you access to a pool of talent. You may pair up with developers to work on mutually beneficial short-term projects or hire temporary employees to serve your company while it morphs and grows. This flexibility in employing human resources can be highly advantageous, but it also presents opportunities for these short-term relationships to take your sensitive information with them. Before sharing your sensitive company information, having workers sign a non-disclosure agreement is essential.  Also, consider whether the individual really needs to have the information to perform the task you have retained him or her to perform as well as the long-term prospects of your relationship with the individual.

  1. Don’t give away your best ideas

If you’re in coworking space, you may be tempted to tell people about the ideas you are most excited about. However, you should temper your excitement to the extent that it compels you to tell your fellow coworkers about your best, innovative ideas. These ideas can very well form the basis of a company trade secret and once you start telling people outside your company about them, they become increasingly difficult to protect.

Thank you to Ben Perkins, BFV’s 2019 summer associate, for his help in writing this blog post.

BFV Perspectives, BFV Videos, Noncompete & Trade Secrets, | Jun 26, 2019
Benjamin I. Fink
Benjamin I. Fink

Benjamin Fink is known for his work in noncompete, trade secret and competition-related disputes. A shareholder at Berman Fink Van Horn, Ben concentrates his practice in business and employment litigation.