Protecting Intellectual Property from Insiders and Hackers: A Practical Analysis

Intellectual property (IP) is a valuable and critical asset for businesses, and it can include a variety of confidential information such as trade secrets, processes, how-to-documents, lists, patents, copyrights, and trademarks. However, protecting IP from insiders and hackers can be a challenging task for business leaders. Insiders are employees, contractors, and partners who have access to confidential information, and they can pose a significant threat to IP security. Hackers are obviously external threats who use various methods to gain access to confidential information and use it for their benefit or sell it on the dark web. In this practical IP security analysis, we will explore the best practices for protecting intellectual property from insiders and hackers and the types of intellectual property that require protection.

Types of Intellectual Property

Trade Secrets: Trade secrets are confidential information that gives businesses a competitive advantage. They can include formulas, processes, designs, and customer lists. To protect trade secrets, businesses can implement policies that restrict access to sensitive information and require employees and contractors to sign nondisclosure agreements. ??

One client we worked with had very large posters on the wall in their production facility.?These posters depicted the entire product build process, final assembly steps, QA process, and included shipping guides for quickly selecting the proper packaging for each product.??A warehouse fire destroyed those posters…backup EVERYTHING. ?Web3 companies have sensitive trade secrets in algorithms and software modules. ?Professional services firms have client lists, billing histories, and often sensitive client information that cannot be exposed.?

Patents: Patents protect inventions such as products, processes, and methods. They give the inventor the right to exclude others from making, using, or selling the invention for a certain period. To protect patents, businesses should keep patent applications and granted patents secure and ensure that employees and contractors who work on patent-related tasks sign nondisclosure agreements.

While patents provide legal protection, loss of the concept could enable competitors to pursue similar projects faster, beating you to market. Patent filings also expose much of the concept to the public so retaining key components of the offering as trade secrets can be an important strategy to protecting IP.??It’s important to understand that patent law varies from country to country and that as the world gets more and more connected, patents may not matter to some organizations.?They will just copy what you do.?So, effectively managing the components of your work partially as patented inventions and partially as trade secrets is important in global markets.??Consult your attorney for details.??

Copyrights: Copyrights protect original works such as books, music, software, and other creative works. Copyright holders have the right to reproduce, distribute, and perform their works. To protect copyrights, businesses should ensure that their employees and contractors do not use copyrighted materials without permission and that all copyrighted works are properly registered.

Trademarks: Trademarks protect brand names, logos, and other identifying marks. They give businesses the right to prevent others from using similar marks that could cause confusion for customers. To protect trademarks, businesses should ensure that their trademarks are properly registered, and that employees and contractors do not use similar marks without permission.

Copyright and trademark violations are rampant now and major corporations such as Harley Davidson and Disney make significant revenue from licensing their corporate property in many forms.?To protect your original products, global technical scanning tools are now available to identify if another party is reselling your work products without permission.?You’ll need to decide if a person selling individual items on Etsy is worth pursuing or not while a large retailer may be worthwhile to pursue.?First you need to know who is taking advantage of your works though.??

Best Practices for Protecting Intellectual Property

Implement strong access controls: Businesses should implement policies and procedures that limit access to confidential information to only those employees and contractors who need it to perform their jobs.?

Implement labeled data:?Labeling files enables technical access controls to limit access to only the data required for that person’s job function.?An administrative person in a biotech firm does not need access to clinical test data for example.??The principle of least privilege can limit data loss protecting your IP.???

Conduct background checks: Businesses should conduct thorough background checks on all employees and contractors who have access to confidential information to ensure that they do not have a history of theft or other criminal activity.??It’s important to understand that there are varying degrees of background checks too.?Some background checks are exceptionally light—just a checkbox. For access to sensitive information or critical roles, choose the right kind of in-depth comprehensive background check. ?

Implement training and awareness programs: Businesses should educate employees and contractors about the importance of protecting intellectual property and the consequences of unauthorized access or theft.??There are a variety of awareness training tools available.?Choose one relevant to your business and track progress.?Are you getting better or not? What percentage of your employees still click on those possibly malicious email links???If it’s not getting better, using a different tool or training technique may be warranted.?If you don’t do it right, it’s not worth doing and your IP will not be protected.?

Use encryption and other security technologies: Businesses should use encryption to protect sensitive information from unauthorized access and use other security technologies such as firewalls and intrusion detection systems.?Again, labeling and categorizing data can identify which information requires encryption. With remote workers and extended partners, encryption and restricted access to information is critical.??A remote worker with a dual-homed computer (connected to the Internet and a VPN at the same time) can provide internal access to your IP through your corporate VPN.???Endpoint protection can make sure those remote workers are properly secured protecting your IP.??

Backup: ?Backup everything…at least weekly. Don’t forget to make copies of those non-electronic items too.?A critical IP component might be a process on a wall, a paper list of key suppliers, a custom tool, or an important hardware and software component. A best practice is to do incremental backups daily and full backups weekly. It is also important to know where your backups are going.?Backups in the same building are insufficient.?They should be off-site, maybe in the cloud, encrypted of course.?Lastly, test backups quarterly. ?Can you actually get those files back??You’d be shocked at how many firms think they are doing reliable backups but are actually not and find out at the worst possible time.??You can lose intellectual property by not backing it up diligently.??

Monitor network activity: Businesses should monitor networks for suspicious activity and establish a process for reporting and responding to security incidents.?Government contracts often require breach reporting in 24 hours as well. ?A best practice is obviously to monitor what’s coming into your organization but egress or outbound monitoring is very important to quickly identify malicious code attempting to “phone home” to China or wherever it came from.?Egress monitoring can also identify large unauthorized data transfers quickly.??Where to monitor matters too. With dispersed workers and cloud services, network monitoring requires data integration from multiple points…not just an office firewall.?Tools are available to make this simpler and more cost effective now.??Network monitoring can significantly reduce the risk and volume of IP stolen from your organization.?

Conclusion

Protecting intellectual property from insiders and hackers is a critical task for business leaders. The types of intellectual property that require protection include trade secrets, patents, copyrights, and trademarks. ?Consider the less obvious must have items used in business operations so they are not forgotten.?Can you rebuild in another location with what you’ve protected???To protect intellectual property, businesses should implement strong access controls, label data, conduct background checks, implement training and awareness programs, use encryption, backups, other security technologies, and monitor network activity. By taking these steps, businesses can mitigate the risk of intellectual property theft and ensure that critical confidential information remains secure.??

For assistance protecting your critical IP, contact LP3.??