Where smaller firms lose control of technology
Much of a small company's valuable technology lives as trade secrets, such as source code, formulas, processes, and customer-specific engineering. Protection depends on the company taking reasonable steps to keep that information secret, and courts look at what was actually done, not only at what policies say. Disclosures to larger partners during pilots or bids are a common source of loss when the confidentiality agreement is weak or missing. Departing employees and contractors are another, especially when invention assignment agreements were never signed. Work commissioned from outside developers usually requires a written assignment to transfer ownership, because the rules treating commissioned work as owned by the client cover only limited categories. Trade secret claims in New York rest on court decisions rather than the uniform statute most states use, and the federal Defend Trade Secrets Act offers a second route.
Steps worth putting in place
Identify what is actually secret and valuable, and limit access to it by role. Use confidentiality and invention assignment agreements for employees and contractors, and confirm that older hires and founders signed them too. Mark confidential materials and record what is shared with partners, when, and under which agreement. For inventions that can be reverse engineered from a product, patent protection may be worth evaluating before any public disclosure, since disclosure can affect patent rights. Keep access logs and offboarding procedures that recover devices and disable accounts promptly when someone leaves.
How we approach a first review
We begin by mapping the company's key technology, who has had access to it, and which agreements cover each relationship. Gaps in ownership, such as code written by a founder before formation or by an unassigned contractor, are often fixable through assignments signed now. If a partner or former employee may already be using your technology, we discuss preservation, a demand letter, or court action, and the risks of each. For upcoming negotiations with larger companies, we review confidentiality terms and how deliverables are structured. Patent filings, where appropriate, are handled with registered patent practitioners.
