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Protecting digital trade secrets

Companies used to keep sensitive information in locked filed cabinets or safes that physically stopped unauthorized parties from accessing it. Today, however, companies typically store trade secret files digitally. Protecting this information can require more sophisticated measures than a lock.

If your company stores proprietary information on the cloud or other digital means, you should know how to protect it from inside and outside threats. 

Reasonable measures to protect information

There are several ways to protect trade secrets to keep them confidential. The exact remedies will depend on your needs and the accessibility of information. However, some of the most common options include:

  • Encrypting data, which encodes data that can only be translated by authorized parties and makes it incomprehensible to anyone without encryption keys
  • Requiring passwords to open files, which keeps unauthorized parties out and can identify all users who log in to view the information
  • Having parties sign confidentiality and non-disclosure agreements to identify protected information and legally bar parties from unauthorized use and access
  • Labeling confidential information as such
  • Auditing your security measures from time to time to isolate and repair breaches

These are reasonably simple measures that can go a long way in keeping trade secrets secure. 

Tackling unauthorized access

With adequate security measures in place, companies can stop people from accessing and sharing digital data and minimize the risk of it being shared. 

For example, recently, a man attempted to steal trade secrets from his employer, a defense contractor. Reports note that he downloaded tens of thousands of documents related to proprietary aircraft detection systems while he was working. After accessing the files, he transferred them to a personal external hard drive and then shared them with other parties.

Without protective measures in place, his actions could have caused significant financial damage to the employer.

However, the company had alerts in place that detected the use of an unauthorized device – the external hard drive – downloading proprietary information. The system then reported the breach, which led to an investigation by the Federal Bureau of Investigation (FBI) and resulted in federal criminal charges.

This case highlights the importance of securing trade secret files, whether you keep them on a local computer network or in the cloud. Even though the information may be digital, it requires concrete solutions to keep it secure.


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