Confidential information is your company's lifeblood.  Confidential and proprietary information provide your company with valuable tools to remain competitive and achieve success in a challenging marketplace. Technologies, secret processes, customer lists, marketing data, financial and strategic plans are among the most important elements of your company's current and future business success. A one simple breakdown in your company's protection of its proprietary information, whether deliberate or inadvertent, can be critical.

1. Implement a Trade Secret Protection Plan
Since proprietary information represents a tremendous investment in time, money and effort, and a valuable asset, you must vigorously protect the company's proprietary information. Every company with sensitive information should consider implementing a confidential information protection plan - frequently referred to in some companies as a Trade Secret Protection Plan (TSPP) - in order to maximize the protections of sensitive information while reducing risks of inadvertent disclosure. A TSPP should include procedures for managing sensitive information, controlling access to areas where sensitive information is stored such as locked rooms and file cabinets, sign in sheets, and smart cards, routinely using confidentiality agreements with employees, contractors, and partners, and establishing an effective email and Internet user policy. 

2. Once lost forever lost
Once the confidential nature of sensitive proprietary information is lost, the ability to thereafter keep the information confidential is lost. An inadvertent disclosure of sensitive information can permanently prevent your company from subsequently controlling the confidentiality of the information. In other words, once lost, forever lost. You rarely get a second chance.
Your company faces many information disclosure risks. An inadvertent statement by an employee, theft of trade secrets, fraud, breach of contracts, disgruntled employees and capture of information sent by e-mail are serious risks. The emerging information age is increasing the value for obtaining information about competitors while increasing the need to protect one's own information.

3. Action steps to reduce disclosure risks
A Trade Secret Protection Plan will aid your organization in achieving good employee and third party practices for protecting company secrets and proprietary information. Whether you adopt a formal written plan or an informal plan, here are a few of the steps you should take to protect your sensitive information.

a. Use employee confidentiality agreements. Have every employee sign a confidentiality agreement. Although most states impose confidentiality obligations on employees as a matter of law even in the absence of an agreement, the presence of an agreement increases the company's chance of prevailing in the event of an actual or threatened disclosure. Most importantly, an agreement increases employee awareness of the need to keep information secret, and thus, reduces the chance of inadvertent disclosures.

b. Use contractor and partner confidentiality agreements. Have each contractor or strategic partner who has access to any trade secret information sign a confidentiality agreement. An agreement is generally necessary to enforce any confidential obligations against third parties. Plus, an agreement can identify the extent of the duties and responsibilities of contractors in protecting your information.

Know the person and organization to whom you will make disclosures. Conduct a background investigation if necessary. Confidentiality agreements, although essential elements in maintaining confidentiality, are only as good as the integrity of the individuals standing behind the contract. A contract in and of itself has little benefit in protecting your information if the individuals are unable to comply with the written obligation.

c. Mark sensitive documents as "confidential". Clearly mark all confidential and trade secret information as confidential. Place the words "Confidential", "Trade secrets" or "Do not disclosure" or other similar words to make the reader aware of the sensitive nature of the information. For documents (electronic and hardcopy), consider placing the markings on each page. The objective is to clearly place the reader on notice.

Place cover pages on sensitive reports and memos so a reader does see sensitive text before seeing the "confidential" designation. If sending trade secret information by interoffice mail, mark the envelop with an obvious confidential mark, and identify the person with the authority to view the materials.

d. Limit use of email and Internet in absence of protection. Refrain from sending sensitive information over the Internet by email, voice conferencing or video conferencing unless you incorporate effective passwords or encryption. Remember, even an inadvertent disclosure can forever eliminate your ability to subsequently enforce confidentiality protections over sensitive information.

e. Control access to information. Control access to areas were sensitive information is stored. If necessary, incorporate locked doors and files, passwords, badges, photo identification, and other forms of security to control access.

f. Implement Internet and online user policy. Implement an Internet and online systems usage program that gives the company the ability to inspect and monitor email and other Internet usage by employee. Inadvertent and intentional disclosure can easily occur over the Internet and email systems. Remind employees about the open nature of the Internet and the related disclosure risks.

g. The Crown Jewels. Treat your sensitive information as if the information were the Crown Jewels. Your corporate culture, your statements during meetings, your actions and your intellectual focus should treat the trade secret information in a serious and focused manner.

4. Watch the disgruntled employee
One of the greatest risks of improper disclosure is from disgruntled employees. Managers should constantly assess the ability of their subordinates to keep information confidential. If an employee becomes disgruntled, the manager should take all reasonable efforts to remind the employee of their contractual and statutory obligations to maintain the confidences of the company, and if necessary, limit the employees continued access to sensitive information.

5. Economic Espionage Act
The federal government and some state have passed laws prohibiting the improper disclosure of confidential information, and impose criminal sanctions in the event of improper disclosures. Your company can seek the protection of these laws only if you have taken the appropriate measures to protect the information prior to the disclosure.

6. Inadvertent v. intentional disclosures
Ultimately, the risk of a damaging disclosure comes down to two types - 1) intentional disclosures, and 2) inadvertent disclosures.

To reduce the risk to intentional disclosures, tightly control access to sensitive information, clearly identify every person who has access to the information, routinely use confidentially agreements, and balance the benefits of each third party disclosure against the potential costs of an improper disclosure.

To reduce the risk of inadvertent disclosures, keep individuals with access to sensitive information aware of information sensitivity, continually stress a corporate culture of discreteness, clearly mark sensitive documents as confidential, implement a company confidentiality program, and keep the provision of the program fresh in the minds of those who handle the information. Furthermore, employees need to understand what information the company allows them to share and not to share. Many employees are simply not aware of the necessity for confidentially and make unknowingly damaging disclosures to friends, during casual conversations over the phone or at parties. Lastly, provide access to only those employees and contracts who are competent and responsible enough to protect the Crown Jewels.

7. More resources
To learn more about developing and implementing a company confidentiality program and creating confidentiality agreements, please search the resources provided in this site including trade secret and confidentially forms, articles and Q&As.