Theft of Proprietary Information

Client: A Silicon Valley Manufacturer of Electronic Laboratory Equipment 

An electronic lab equipment manufacturer suspected that their competitor was stealing trade secrets, including lists of their customers. They also suspected the competitor had an unfair advantage, as the firm could not be producing the equipment at their regular place of business based on the facility and personnel reported in public records.  The competitor was attacking their firm with expensive and frivolous lawsuits, and appeared to be gaining near immediate access to the client’s legal documents.

Gladding & Michel conducted an electronic countermeasures sweep of the client’s office and production facility. While no bugs were found, we identified numerous security weaknesses in their telephone and fax system, as well as their company protocols for the distribution, storage, and accounting of internal documents. We ultimately provided technical assistance in implementing secure control of company documents.

Gladding & Michel also visited site of the client’s competition, and determined that they were outsourcing production to an assembly plant in the Southwest. Since the competitor was a privately held company, financial information was not available in public documents. Our analysis of financial records in the competitor’s recent divorce file (overlooked by attorneys handling the divorce), provided up-to-date detailed financial information on the firm. This newly discovered information proved invaluable in the client’s bargaining to end the legal attacks by their competitor.