Stealth mode

Last updated November 22, 2024

In business, stealth mode is a company's temporary state of secretiveness, either in total stealth mode when everything about the company is kept secret, or in-company stealth mode which is usually undertaken to avoid alerting competitors to a pending product launch or another business initiative by keeping that specific thing covert.^[1]^[2]

When an entire company is in stealth mode it may attempt to mislead the public about its true company goals. For example, it may give code names to its pending products.^[2] It may operate a corporate website that does not disclose its personnel or location. New companies may operate under a temporary "stealth name" that does not disclose its field of business. To enforce stealthy behavior, companies often require employees to sign non-disclosure agreements, and strictly control who may speak with the media.^[2]

At the in-company stealth mode level, a stealth mode can also refer to a new project or idea that is kept secret, not just from external parties, but also from internal stakeholders in order to avoid a (premature) dismissal of the idea. Key behaviors can include soliciting informal project sponsors, engaging in covert testing of the concept, freeing up extra resources and building a "cover story" for the project.^[3]

A stealth product is a product that a company develops in secret, while a stealth company is a new company that avoids initial disclosure as to its existence, purpose, products, personnel, funding, brand name, or other important attributes. The term stealth innovation has been applied to individual projects and ideas that are developed in secret inside a company.^[3]

Background

Whereas secrecy is the historical norm in many fields of business,^[2] start-up companies often thrive on publicity and open sharing of information. Openness is common to the business culture of Silicon Valley and other technology centers, with competitors freely exchanging news of discoveries, products under development, and other company news. There is intense media interest in some business sectors, with even relatively small funding rounds covered in specialized press. Public relations is considered useful to attract interest from talent, customers, and investors, and to promote the careers of the people involved. Additionally, competitors often collaborate on projects or buy each other's products. Some companies nevertheless avoid publicity in fields that are ordinarily not secretive. Among the reasons, a small, relatively unfunded company may wish to avoid giving companies with more resources time to develop competing technologies. The very announcement that a larger or better-known company is working on a competing product may damp interest in the smaller upstart.

If the innovative company has no realistic means of protecting its new intellectual property, it may seek to obtain a "first-mover advantage" by waiting until the company or its products are ready to sell before they are announced. This gives as long a lead as possible before others may copy its products, distribution channels, brand, or other business advantages. Similarly, companies with a protectable new technology may nevertheless wish to wait until they have filed or obtained a patent.^[2]

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A non-disclosure agreement (NDA), also known as a confidentiality agreement (CA), confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement (SA), is a legal contract or part of a contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wish to restrict access to. Doctor–patient confidentiality, attorney–client privilege, priest–penitent privilege and bank–client confidentiality agreements are examples of NDAs, which are often not enshrined in a written contract between the parties.

A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an enabling disclosure of the invention. In most countries, patent rights fall under private law and the patent holder must sue someone infringing the patent in order to enforce their rights.

A trade secret is a form of intellectual property comprising confidential information that is not generally known or readily ascertainable, derives economic value from its secrecy, and is protected by reasonable efforts to maintain its confidentiality. Well-known examples include the Coca-Cola formula and the recipe for Kentucky Fried Chicken.

<span class="mw-page-title-main">Classified information</span> Material that government claims requires confidentiality

Classified information is material that a government body deems to be sensitive information that must be protected. Access is restricted by law or regulation to particular groups of people with the necessary security clearance with a need to know. Mishandling of the material can incur criminal penalties.

Stealth may refer to:

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Patents are legal instruments intended to encourage innovation by providing a limited monopoly to the inventor in return for the disclosure of the invention. The underlying assumption is that innovation is encouraged because an inventor can secure exclusive rights and, therefore, a higher probability of financial rewards for their product in the marketplace or the opportunity to profit from licensing the rights to others. The publication of the invention is mandatory to get a patent. Keeping the same invention as a trade secret rather than disclosing it in a patent publication, for some inventions, could prove valuable well beyond the limited time of any patent term but at the risk of unpermitted disclosure or congenial invention by a third party.

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Information sensitivity is the control of access to information or knowledge that might result in loss of an advantage or level of security if disclosed to others. Loss, misuse, modification, or unauthorized access to sensitive information can adversely affect the privacy or welfare of an individual, trade secrets of a business or even the security and international relations of a nation depending on the level of sensitivity and nature of the information.

Bootlegging in corporate research and development is defined as "a non-formalised and non-declared (secret) bottom-up innovation process for the benefit of the bootlegger's firm." In corporate bootlegging, an employee works on a project or projects unconnected to their "official" work, and is generally allowed to do so in the understanding that it may benefit the company in some way; however, managerial approval is not always given. David A. Schon introduced the notion of bootlegging into economics and business administration literature in 1963.

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A stealth startup is a type of startup company that operates quietly and in silence to outsiders, avoiding public attention. This may be done to hide information from competitors, or as part of a marketing strategy to manage public image and generate expectations and interest from potential clients. A stealth startup normally operates only in stealth mode for its first few years.

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The following outline is provided as an overview of and topical guide to patents:

The German Law on the Protection of Trade Secrets, or Trade Secrets Law in short, serves to protect business secrets against unauthorized acquisition, use, and disclosure. The law implements the Directive (EU) 2016/943 on the Protection of Trade Secrets in German law. It replaces the right to secrecy, which was previously regulated in §§ 17-19 of the Act Against Unfair Competition.

References

↑ "Definition of stealth mode". PC Magazine. Retrieved 2007-12-05.
1 2 3 4 5 Mark Henricks (April 2001). "Hush Hush - stealth product development can protect innovations". Entrepreneur. Retrieved 2007-12-05.
1 2 Miller, Paddy; Wedell-Wedellsborg, Thomas (March 2013). "The Case for Stealth Innovation". Harvard Business Review .

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[1] "Definition of stealth mode". PC Magazine. Retrieved 2007-12-05.

[hush-2] 1 2 3 4 5 Mark Henricks (April 2001). "Hush Hush - stealth product development can protect innovations". Entrepreneur. Retrieved 2007-12-05.

[Stealth_innovation_article-3] 1 2 Miller, Paddy; Wedell-Wedellsborg, Thomas (March 2013). "The Case for Stealth Innovation". Harvard Business Review .

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