Intellectual Property and its Protection Methods (TLDR)

Intellectual property may consist of ideas, procedures, mathematical formulas, source code, and other unique abstract entities used by a given company. Intellectual property is key to successful competition in most industries. In order protect intellectual property, there is a wide variety of laws and processes that are employed.

Patent Law

Patents are legal records that allow companies to protect their registered ownership of an idea for a limited amount of time. This allows them to enjoy the temporary exclusive competitive edge of a new idea in exchange of  public disclosure of the intellectual property. Eventually, patents expire, allowing other businesses to enjoy the idea as well. Patent law is designed to encourage innovation without engaging in excessive gatekeeping.

Trade Secrets

Trade secrets are industry-specific and closely guarded pieces of intellectual property; they have no legal protection, and it is up to individual companies to guard these trade secrets against various types of compromise. Trade secrets may be compromised by internal employees, who may be disgruntled and choose to leak the information to exact revenge. On the other hand, trade secrets may be stolen or compromised by cyberattacks or even outright physical theft. However, trade secrets can also be compromised by less sneaky threat: inadvertent leaking of data to business partners. All of these these threats can be mitigated using the right careful procedures.

To protect against all of these threats, companies may implement non-disclosure agreements, carefully monitor access of systems, treat employees well, and keep track of which employees are very displeased with the company. Protecting trade secrets from physical threats may be accomplished by cybersecurity methods such as encryption and firewalls in addition to increasing physical security practices. In order to prevent business partners from stealing secrets, control and monitor external access to sensitive information very closely.

However, even the measures mentioned above may often be more complicated than may appear; detailed internal measures will need to be implemented. Companies need to categorize and prioritize which pieces of information need security, how much security to implement, and establish a system for levels of information access based on a hierarchy of roles. Further, companies must have policies and procedure planned for continually monitoring and logging the access of every copy of sensitive information and vigorously train employees how to treat each type of information based on the level of access they are permitted. Also, since information will inevitably be handled by people outside of the company, it is important to ensure that proper legal documentation and procedures are put in place to guard internal data that is used externally.

Finally, if against all efforts, there is a data breach or theft, the company needs to have a plan in place for appropriate investigation and prosecution.

To summarize, here are some prevention procedures:

  • internal monitoring: detailed logs, analytics, statistics
  • internal access controls: prioritize data, establish role hierarchies, train employees on how to hold and guard intellectual information, the “need to know” principle
  • internal protection: encryption, limiting physical access, non-disclosure agreements
  • external monitoring: make sure access controls and legal protection (patents, copyright, etc) are implemented, non-disclosure agreements are signed, and have an attorney help manage this
  • external protection: encryption, firewalls, secure passwords, and other anti-hacker and anti-malware protection measures, the “need to know” principle, use advantages as quickly and efficiently as possible


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