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Safeguarding Trade Secrets in the Age of AI
Recently it was published that ChatGPT now processes daily more than 2.5 billion prompts worldwide, with 330 million from the U.S. alone. Further, ChatGPT now serves half a billion weekly active users. The question business owners should ask is, “How many of these users are my employees?” and “How many of them are using artificial intelligence (AI) in my business without me knowing it?” An additional question may be, “Should I care?” To answer these questions, business owners must understand how these large language models (LLM) AI sites work. Generally, the information input into the LLM becomes part of the LLM’s knowledge. The risk to businesses is that a well-meaning but uninformed employee could risk your trade secrets and proprietary information by sharing this information with ChatGPT, Gemini, Grok, or other LLMs they are using to complete work tasks.
Businesses protect their trade secrets by taking reasonable measures to keep them secret. These trade secrets, be they financial, business, scientific, technical, economic, or other unique techniques and processes, risk losing their legal protection when the business fails to continuously enforce their reasonable measures to keep their information secret. If their trade secrets get input to an LLM AI, such as ChatGPT, Gemini, Claude, Grok, or others that are learning from their inputs, their trade secrets are at risk. Losing trade secret protections can create significant business harm!
How can businesses protect themselves? First, businesses need an AI Use Policy. Then, they need to educate their employees about AI and how it can be used within their workplace. Further, they need to make sure their employees understand what trade secrets and proprietary information are for their job and for your business to be certain they understand their obligation to protect it from disclosure, even if the disclosure is to AI. Lastly, employers should take reasonable steps to enforce their AI Use Policy so that there are consequences for employees to reinforce compliance with the policy.
By establishing a policy and educating employees, businesses can more likely prove that they took reasonable measures to protect their trade secrets, and therefore, still have trade secrets for the court to protect.
AI can be an incredible tool when used correctly in your business, but it does come with risk. If you have questions about AI and its impact on your business or need help with an AI Use Policy and employee education, please feel free to reach out to Steve Barham or your relationship attorney.
