Protecting Trade Secrets in the Energy Industry: What Companies Must Know Now
The energy industry sits at the center of a technological and geopolitical crossroads. Scaling renewable projects, digitizing operations, and expanding into emerging technologies provide endless opportunities for innovation. Yet, with this opportunity comes risk – increased employee mobility, complex joint ventures, and widespread remote work can put the trade secrets at the heart of the business at risk. Protecting this valuable intellectual property is more than good corporate hygiene, it is a strategic necessity.
The Trade-Secret Threat Landscape Has Shifted
Remote work, the rise of AI, and talent migration across energy sectors have transformed not only how we operate, but how sensitive information is shared, stored, and used. AI tools are helpful, but risky. Many common platforms openly state that the information entered into the system is not secure—it is reviewed by humans to help train the AI systems, it is stored and retained for training and analysis, and it is not encrypted. This insecure environment creates access points for bad actors seeking valuable information.
AI and machine learning tools are deeply embedded in daily energy operations. From predictive maintenance to drilling or turbine optimization, or from demand forecasting to energy trading algorithms, AI plays a robust role in daily operations. These tools are frequently stored in the cloud where even the best ecosystems have exposure risks.
Employee mobility has increased since remote work took hold—workers are no longer limiting their employment options by the length of their commute, making it easier to transition between roles. Specialists in drilling analytics, geoscience, hydrogen, and renewable technologies are in high demand, with skills often transferable across sectors. Departing employees may intentionally or inadvertently take proprietary information with them. Some may believe the work they created is theirs to keep, unaware that any work product belongs exclusively to the employer. In fact, employees — not outside hackers — are the most common source of intellectual property loss.
Industry collaboration is equally a double‑edged sword. Joint ventures and contractor relationships can accelerate innovation, but they also increase risk. At the end of a project, proprietary data can become the subject of disputes — or, in worse cases, continue to be used by a former partner after the relationship has ended.
The common thread: most trade‑secret misappropriation happens inside the ordinary course of business, not in the shadows of external attacks.
Turn Awareness to Action.
Trade secrets only drive value when they are used — but use increases exposure. The key is to protect without stifling operations. Four steps can help:
First, map what matters. What actually qualifies as a trade secret varies from business to business. Identify categories of critical information and pinpoint where it is stored to assess existing protections and fortify weaknesses.
Next, control access. Disclose sensitive information on a need to know basis. Use password protections and segment access across the company to limit access. Control the electronic environment as well—use a VPN and limit the use of external hard drives, personal email accounts, and unauthorized file transfer services. Conduct regular review and patch vulnerabilities before they are exposed.
Third, double check the fine print. Ensure that NDAs, joint venture agreements and project contracts are current and robust. Joint venture or project contracts should clearly define IP ownership from the outset and address data return or destruction at the conclusion of the project. The documents should also provide a remedy for breach—ensure that emergency relief petitions like injunction applications are permitted and that contracts with foreign partners select a choice of law in a jurisdiction with meaningful IP protections.
Finally, manage employee education and transitions effectively. It is not enough to have employees sign an NDA the day they join the company. Foster a culture of confidentiality by explaining obligations during onboarding and providing regular reminders and training throughout employment. When employees leave, clearly explain the company’s exclusive ownership rights and give them a chance to admit a mistake and return sensitive information before issues escalate.
Conclusion
The energy industry’s rapid evolution brings extraordinary opportunities for development, collaboration, and change — but these same forces create fertile ground for trade‑secret misappropriation. By combining proactive risk analysis with robust legal safeguards and a strong culture of confidentiality, energy companies can innovate and grow while maintaining their competitive edge.
