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Appendix 14

Report on Pilot Survey

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The purpose of this pilot Survey was to get direct feedback from respondents about the structure of the questionnaire. In particular, we were interested in acquiring information

about:

i) Perceived time-cost of answering the questionnaire ii) Perceived difficulty of the questions

iii) Ability of questions to discriminate across respondents

For this purpose, we have identified a set of 21 European companies belonging to different industries and different countries, and we have invited them to answer the questionnaire online. They have been contacted (by e-mail) by the Project Manager and they have been

provided with an access code. The list of the companies contacted is enclosed in Annex 1.

Out of 21 companies contacted, only 12 have completed the questionnaire in all its parts. One

has answered nearly half of the questions. That about 50% of the companies contacted were not able to complete the questionnaire shows that it is over-long and too complex.

On top of the feedback provided by the responses, we have collected comments from some of the respondent. They have reported a completion time of about 30-35 minutes. Some of them

point out that the number of answers (for some questions) is too high, that some questions

are too technical, and that the structure of the questionnaire can be improved.

The analysis of the responses shows that the questionnaire is able to gather the information

sought. In general, TS/CBI are reported to be valuable assets for the companies. Respondents would regard as highly beneficial EU intervention in this field (Q31).

The questionnaire seems to be able to capture the specific features of companies belonging to

different industries. For most of the questions, there is high variance in the responses.

In light of the results of the pilot survey, we suggest that the major problem to be tackled

relates to the length of the questionnaire – a point also raised by some participants to the

Brussels Conference. More specifically, we propose what follows.

1) We suggest that the number of questions be reduced from 43 (32 questions on TS/CBI + 11 about the company) to a maximum of 30, so as to bring the completion time down to 15-20 minutes. The expected completion time would then be reported in the

invitation letter and help people overcome their resistance to start (and finish) the questionnaire.

2) Questions should be simplified whenever possible. In particular, for some questions, the number of possible answers should be reduced and the language streamlined.

3) The introductory webpage should try and provide a better motivation. The policy relevance of the questionnaire should be better emphasised.

Specific comments on the responses and a proposal for improvement are provided below.

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Respondents

12 companies have completed the pilot questionnaire. Out of these, 6 are based in Italy, 2 in

France, 2 in Switzerland, and 2 in Spain.

7 companies are active in Manufacturing, 1 in Computer programming, consultancy and related

activities, 2 in Scientific research and development, and 2 in Retail trade (Q35).

The set of respondents includes companies with turnover ranging from € 4 million to € 1

billion, number of employees ranging from 17 to 15,000.

Questions: results and recommended improvement

Questions will be ranked according to their importance/relevance as Weak, Medium, or High.

Weak questions should be considered for removal from the questionnaire.

In ranking the relevance of the answers, we have attached a value of 0 to N/A, 1 to “low”, 3

to “medium” and 5 to “high.” The “most relevant answer” is the one that scores the highest value.

Medium. This question servers mostly an introductory purpose and conveys very little information. It

provides a soft approach to the questionnaire.

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Medium. This question captures the differences across industries. Responses are highly varied. Areas

that appear most relevant are: “Product technology,” “R&D information,” “Undisclosed financial

data,” “Commercial bids and contracts,” and “Customer profiling/.” The least important: “Software” and “Organizational processes.”

5

The question is too complex, as it provides for too many answers (as pointed out by one

respondent). The number of answers should be reduced from 17 to 10 (at most).

Given the high correlation between answers, “Undisclosed financial data,” “Sales and service

information” and “Business/financial planning,” “Customer profiling/market surveys,” and “Customer surveys/supplier assessment reports” should be merged in: “Business and financial

information.”

“Software” and “Organizational processes” can be dropped altogether.

“Manufacturing technique” and “Formulae and recipes” can be merged in “Manufacturing techniques (including formulae).”

Medium.

6

Weak.

The content of this question is somewhat subsumed by Q1 and Q2 (value of TS/CBI).

To the least, is should be redrafted as:

“Importance of TS/CBI for the competitiveness/innovative growth/ performance of your company:

□ Low □ Medium □ High”

7

High. The question captures differences across industries. The companies of our sample rely mostly

on Patents and Trademarks.

High.

8

The question captures differences across industries. For the companies of the sample, the most

relevant answers are “Potential lack of eligibility” and “Limited lifecycle.”

High.

The question captures differences across industries.

Weak. The question does not provide a clearly defined temporal span.

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Medium.

Could be replaced by a more direct question: “Fear of losing secrecy by misappropriation, unauthorized disclosure, etc., prevents your

company from sharing TS/CBI with third parties:

□ N/A □ Low □ Medium □ High”

10

High.

Question captures differences across industries with respect to knowledge diffusion. Most relevant diffusion means is: “Clients-customers.” The least relevant is “Misappropriation

and/or espionage” (here we might obviously have a truthful reporting issue).

Some answers can be removed: “Due diligence on business partners” and “internet posting and disclosures” which are less relevant from a policy perspective.

11

High. The question captures differences across industries. The most relevant answer is “Former

employees,” followed by “Current employees.” The least relevant are ”Employees of industry

regulators” (only applies to a subset of companies), “Visitors,” “Investigation companies” “Public administration customers” and “Employees of service providers.”

In order to streamline the questionnaire, the number of answers should be reduced from 12 to 8 (max).

“Private customers” and “Public administration customers” should be merged in

“Customers/clients.” “Visitors,” “Investigation companies” and “Employees of service providers” should be

removed.

“Employees of industry regulators” can be rephrased as “Regulatory agencies”.

12

Weak.

The question is time consuming. Precise answer requires in-depth knowledge of legislation of

EU countries. Question should be removed. Similar information is gathered in the final part of the

questionnaire.

13

Weak.

Reading of this question is time consuming. Furthermore, it enquires about the respondent’s personal opinion, with little factual basis.

14

Weak.

The question captures some differences across industries. The most relevant answers are

“Access limitation” “Computer safeguards” and “Confidentiality agreements.” The least effective: “Increase in salaries” and “Screening”.

While the question might provide some information about the costs borne by companies for

the protection of their secrets, it is not central from a policy perspective.

15

The double layer (what type / degree of effectiveness) has created some confusion.

If retained, the question could be simplified to a YES/NO pattern (tick when applies).

Weak.

Only applies to multinationals. Requires special knowledge on the side of the respondent.

High.

This question is starting point for other questions on litigation. Question should include both attempts and acts.

16

Weak.

Question can be merged with Q16 (as in original questionnaire). Question should include both attempts and acts.

“Did your company suffer acts or attempts of misappropriation of TS/CBI during the last 10 years?

Within the EU: □ None that we are aware of □ 1 to 5 times

□ more than 5 times

Outside the EU □ None that we are aware of

□ 1 to 5 times □ more than 5 times

If your company has not suffered acts or attempts of misappropriation please go to question D.1”

17

Medium. Question is overly time consuming. Employees of investigation companies should be removed

(Investigation companies are already there). The set of answers should be reduced, so as to

coincide with Q.11. Question should include both attempts and acts.

Answers should be simplified.

“Acts or attempts to misappropriate TS/CBI of your company were carried out by (tick where appropriate): ”

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Medium.

Three respondents filled the “Other” line, mentioning a combination of the former. This means that the answer were alternative (by mistake).

“Loss of jobs” can be removed, as it follows (possibly) from the first. “Cost in negotiating a settlement” can be removed as it (partially) overlaps with “Costs in

prosecuting and litigating.”

19

Weak.

From the responses (including those of respondents who have suffered from TS theft several times) , it seems clear that the reply will be NO for all.

Question should be removed.

High. Response 2 and 3 should not be alternatives. If “Not that I am aware of”, skip Q22.

20

Weak.

To streamline the questionnaire, this question should be removed.

Medium.

This question should follow Q20, only for those who have experienced acts or attempts of misappropriation.

21

Weak. Very technical question, only legal counsels can answer it.

22

Weak. Very technical question, mostly for legal counsels/defendants.

5 respondents filled the “Please specify” field, with the following responses: “Only one country

concerned”, “not apply,” “ we were never awarded anything,” “not concerned,” “cost involved and probability of success.”

23

Medium.

Also a technical question. Question should be streamlined to a “Tick where appropriate” set.

“Lack of trust” answer should be removed (does not specify the reason for the lack of trust). First answer should be replaced by “Low value of the TS/CBS in question or of harm suffered.”

24

Weak.

From responses, it is apparent that this is not a relevant issue.

Weak. Same as above.

25

High.

Specific question about benefits of EU intervention. The most relevant response is “Possibility of protecting TS/CBI effectively and efficiently in all Member States”. The least relevant:

“Reduction in the number of forums where TS/CBI cases may be litigated.”

The questionnaire should be structured so that as many respondents as possible answer this question.

Could be streamlined to “Tick where appropriate” set.

26

Medium.

Question about benefits of better TS/CBI legal protection. However, it is speculative in nature. The question format on the webpage was incorrect (first question split in two parts).

Answers are over-long.

Forth answer should be rephrased as follows: □ Greater incentives to invest resources in innovation by providing better assurance that the

investments can be recouped.

27

High.

Question about benefits of EU intervention. The most relevant answer is “Enforcement at EU level of non-disclosure agreements

(preventing contractors/employees to divulge TS/CBI).”

Least relevant: “Investigative power at EU level to indentify parties responsible of TS/CBI misappropriation.”

28

Weak. From responses, it is apparent that this issue is not relevant.

Q 33 asks for the code of respondent (code should probably be the first question)

Q 34 asks for the company name + country

Q 35 asks for the industry

Weak. Distinction is not clear (e.g. software producer: product or process innovation?).

Should be either removed or replaced by question on nature of product market (e.g. price or

quality competition) .

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Medium. Question investigates duration of product.

Q 38 asks for the company turnover

Q 39 for the number of employees

Medium. This question helps to define the profile of companies that assign greater value to TS

protection.

Q 41 provides a box for additional comments.

Two respondents filled it in.

1. “Problem with former employees now working in a French company called [omitted].” 2. “Reverse engineering should not become acceptable as it is in the US. The fragrance

industry would then not benefit at all from the new protection as fine fragrance market

products can be reverse engineered at more than 90% and their lifecycle is very short - e.g. return on investment is short too.”

Q 42 asks for the name of the respondent

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Q 43 asks for the position of the respondent.

Answers were as follow:

Senior Legal Counsel

Legal Counsel

Legal & Corporate Affairs Manager

Corporate Antitrust & Privacy

Manager General Manager of Business

Administration

International Sales Head

General manager

Senior advisor

Corporate lawyer

The variety of potential respondents suggests that technical questions should be avoided.

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Final remarks

The low response rate calls for a drastic streamlining of the questionnaire. Completion time

should be contained within 15-20 minutes and this fact should be properly advertised. Such a

move would substantially increase the number of respondents of the non-structured survey (open-access).

We have identified 15 “weak” questions which could be removed from the survey. This would bring down the number to questions from 43 to 28. Furthermore, the structure of some

questions can be streamlined, as to reduce the time for completion. Companies in the sample will be contacted by phone if they fail to fill in the questionnaire

within a specific time.

Respondents have requested the possibility of saving their answers as they go along, so as to

be able to fill in the questionnaire in different steps. We will investigate whether this feature can be implemented.

The data from responses is encouraging. Questions are able to discriminate across different respondents’ profiles and glean information about TS/CSI litigation issues.

Q31 is central to understand what measures are demanded by EU companies. Respondents seem to be aware of the potential benefits from uniform EU rules.

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Annex A

List of the companies contacted

1. The North Face Italy S.r.l.

2. IFR Menarini S.p.A. 3. Loro Piana S.p.A.

4. BV Italia S.r.l.

5. Azur Fragrances (SME) 6. Firmenich

7. International Flavors & Fragrances Inc. 8. Giorgio Armani S.p.A. 9. Luisa Spagnoli S.p.A.

10. Technogym S.p.A.

11. Amplifon S.p.A.

12. Takasago

13. Expressions Parfumées 14. David Michael 15. Parexel International S.r.l. 16. Vicomtech

17. Ikusi

18. Between S.p.A. 19. KPNQwest

20. Fendi S.r.l. 21. Sintel Italia S.p.a.