Ten Low-Tech Ideas to Protect
BY FRED MENDELSOHN, PARTNER AT BURKE, WARREN, MACKAY & SERRITELLA, P.C. IN CHICAGO
Business secrets – information not available to the public – can range from complex business procedures to things as sim- ple as client lists. All businesses, including distributors, have
“business secrets,” yet many fail to undertake some basic steps to
protect their proprietary information from competitors or disgruntled former employees.
A few practical low-tech steps can significantly improve the
chances of distributors protecting their business secrets or other
valuable confidential information. Once converted, business secrets
and other IP can be effectively lost forever. To recover this intellectual property is next to impossible, and to stop its use and/or get it
back can require years of litigation at significant legal cost.
What to Protect
Business secrets might include customer lists, formulas, software,
business processes, or market information. Theft of IP items can
damage a company just as much as, if not more than, the loss of a
valuable piece of equipment or expensive inventory or component
Value of Low-Tech Precautions
Many businesses, unfortunately, too often “skip the small stuff”
when protecting their business secrets, confidential information
and other IP items. Many use complex confidentiality agreements
(which is not necessarily bad) and expensive labor-intensive techniques like securing patent protection, when a few low-tech procedures are capable of providing as much protection as the pinnacle
Under the law, the mere presence of corporate “policies and
practices” protecting sensitive information helps retrieve stolen
secrets. Courts often find that a business that demonstrates “
habitual protection” of its confidential information will more likely
prove that the information is valuable and merits protection under
the Uniform Trade Secrets Act (which has been adopted in almost
every state). The opposite also holds true: a business that ignores
strict protection of confidential information and other IP items can
create a presumption of low value and little confidentiality.
Like unraveling a political cover-up, the best way to catch an in-
formation thief is to follow the trail of cover ups, copied emails, IP
downloads and rogue hard copies. The more impediments that are
put in place to copying and removing information, the more likely
that the perpetrator will leave a trail of theft.
10 Tips to Save Confidential Information
• Lock Doors and Drawers. Keep the documents, disks or other IP
items in a locked room or storage cabinet.
• Use Document Passwords. Amazingly, emails fly around offices
and through cyberspace without password protection. Companies
that habitually lock secret, or even semi-secret, documents with
passwords avoid years of litigation. If a computer forensics expert
can show that the culprit broke the password, or sent separate
emails sharing the passwords with others, a judge is far more likely
to acknowledge the confidential status of the information.
• Create Virtual Compartments. Business secrets, regardless of the
type of storage media, should be available only to those persons
with a need to know. Rather than simply dumping IP items into
communal drives, distributors should create levels of security to
limit access. Some businesses, for example, even take steps to
prevent their programmers from seeing the entire code, granting
access to only that portion of the software code being developed
by that programmer.
• Use Snail Mail. Documents and other media can be delivered in
hard copy, marked with confidential stamps. Does the other party
need to make copies? Do it for them. Mark all copies with a notation such as “Do Not Copy. This Stamp In Red.” If a black and white
copy lands in the bandit’s hands, it should be easy to prove that he
or she should have known better and was not authorized to have
• Organize Confidentiality Agreements. Many businesses can get
lazy about this. Don’t. Routinely execute and file these agreements
— whether from new employees or other business partners. Such
habits, while not foolproof, demonstrate serious commitment to
confidentiality and will often sway judges to rule against an information thief.
• Leave Your Mark. Companies should aggressively apply copyright
symbols, confidentiality stamps, or trademark notices, appropri-