INTA 2024: Why AI is prompting Coca-Cola and others to review their trade secrets strategy
While the Coca-Cola recipe remains a tightly guarded secret, the firm’s senior managing counsel joined an INTA panel exploring how brands are adapting trade secret strategies in light of generative AI. Tom Phillips reports.
Perhaps the biggest trade secret in the world is kept hidden in Atlanta, GA. So when the International Trademark Association’s Annual Meeting rolled into town this week, there was really only one legal counsel who had all the answers on protecting a company’s ‘crown jewels’.
Speaking at a seminar on trade secrets on the final day of the conference, Yoo-Sun Park, senior managing counsel at Coca-Cola, remained tight-lipped on how many people are privy to the drink’s secret recipe.
But what she did share was how the company manages a trade secret protection programme that is embedded into the global brand’s culture.
Park was joined onstage by speakers from The Weir Group, GE Aerospace, and Corsearch, who tackled the hot-button issue of how AI tools like ChatGPT might affect managing trade secrets.
“People understand and appreciate how much value trade secrets bring to the company,” said Park, which does also make it a target.
“We even had an incident involving the FBI,” admitted Park, who is based at the drinks company’s 29-storey HQ in Atlanta.
New tools, same strategy
Coca-Cola’s strategy revolves around training employees on the programme and maintaining their contracts—a common theme that ran through the session, entitled ‘Trade Secret Management in the Advent of Generative AI’.
“One of the key things is how the information is going to be used, who’s going to have access, how it is going to be disclosed. When it comes to AI tools, this isn’t any different.”
The company uses closed-loop and open-loop AI tools, but only its own AI tools developed in-house are used for trade secrets information.
It may sound surprising that the company does use ChatGPT, but its rules prohibit putting personal and confidential information into the platform. This is maintained by a cross-functional team comprising legal, IT and cybersecurity.
Cynthia Parks McCaskill, deputy chief IP counsel at GE Aerospace, said a lot of companies “pay short shrift to trade secrets programmes because they are so informal”. But it is far better to put in the work before an employee working their notice emails confidential files to a personal account, for instance.
“When you are at the point where you have a trade secrets issue because you’ve had misappropriation, that’s not the time to try to collect all the information that might put you in the best position to have remedies.”
Not all trade secrets are equal
Maria Fe Lazarte, group trademark counsel at engineering company Weir Group, said her company is using AI in combination with other technologies to improve manufacturing processes.
As such her company protects trade secrets “very jealously”. The company has training and education for employees on the use of AI and protecting the company's secrets.
It also links the impact of Weir’s financial performance and the need to safeguard secrets within the company. “When you talk about money, they understand,” said Fe Lazarte.
Companies need to take ‘reasonable measures’ to ensure their trade secrets are protected. To do this, companies must “start at the beginning”, said Diane Fiddle, global chief legal officer, privacy and compliance officer at Corsearch.
On a practical level this means ensuring AI language around trade secrets is acknowledged in all the policies and procedures for onboarding employees. These AI elements can be specific to the employee’s role.
Vendors and partners are also high risk, said Fiddle, who suggested onboarding them too.
“Restrictions on contracts with vendors and doing audits [are critical], because a vendor could change the way they use your data or the way they use AI. You need to be proactive about that.”
The group agreed that not all trade secrets are equal, so not all the same protective measures are needed across the board.
Non-competes ban ups the ante
A US Federal Trade Commission (FTC) ban on non-compete clauses in contracts for ‘senior executives’ could be in place by September. It is being challenged on several grounds and may be held up until the Supreme Court can hear those cases.
But in the meantime there are obvious steps that companies can take, said Megan Carpenter, dean of the University of New Hampshire Franklin Pierce School of Law.
“You should identify your senior executives and define them as such. You should also have non-competes in place now. You cannot classify future senior executives after the ban is in place, but it allows a narrow window for [non-competes] to retrospectively remain in place,” she said.
Corsearch’s Fiddle left the audience with perhaps a corporations’ biggest fear: employees using AI day-to-day and the company not knowing about it.
“You really need to be proactive about it,” she concluded, “to protect your proprietary information, competitive advantage, and to protect your trade secrets.”
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