I own a software development company that has clients all over the globe. We have been working on a new product that is likely to disrupt the market. We started by doing a lot of research and wrote a concept paper based on the same. We then started developing the product.
Mid-way into the project I was shocked when my competitor launched the exact product before me. I did an investigation and found out that my competitor hacked our systems and bribed one of our staff members to leak information related to the project. This is a huge setback for me. Do I have any legal remedies?
Dear Joan, what you are referring to here is known as corporate espionage. It happens when a third party like a competitor uses illegal methods such as hacking to access your business proprietary information.
It is a form of economic warfare. Corporate espionage is very risky to the business as it can lead to massive losses and loss of market share. It is surprisingly mostly done with the help of staff members.
Let us address the recourse available to you.
Firstly, as against your competitor, do you have any evidence of the hacking done by him? In Kenya hacking is illegal. It is both a civil and criminal offence.
If found culpable, your competitor could land himself in a lot of trouble. The downside is that hacking is very difficult to prove.
The Evidence Act gives a minimum threshold before electronic evidence can be accepted. It is therefore up to you to ensure the evidence to prove this is collected well. I would recommend you procure the services of an expert to help in the collection, preservation and presentation of evidence.
This expert shall be part of your witnesses in court. You can then file criminal charges against your competitor and also pursue civil remedies where your competitor will have to pay you general damages for the business losses incurred.
Your stronger claim is against your staff member if you are able to prove that he leaked your business information to your competitors.
The general presumption is that an employee shall not breach confidentiality and shall always act in the employer’s best interest. I would recommend that you terminate that staff member's employment and then pursue a claim for general damages.
It is said that prevention is better than cure. Here are a few tips to minimise corporate espionage in your business.
First, secure intellectual property rights. This gives you the legal grounds to pursue infringement claims against any unauthorised users. You can sue for damages and get court orders to stop your competitor from further infringing on your rights.
Ensure that you are data compliant by getting a data compliance certificate from the regulator. Use of malware and other technological measures will shield you from espionage.
The technological measures include the use of encrypted passwords and limiting access control amongst others.
It is good to monitor staff activities and employ surveillance through the use of technology like CCTV cameras. There are a number of employee monitoring software in the market.
This will help you to identify and deal with any suspicious staff activities.
Ensure that your staff sign confidentiality clauses, especially those who will be involved in the exercise. Finally, train your staff on data protection practices.
Ms Mputhia is the founder of C Mputhia Advocates | [email protected]