Intellectual property protection extends beyond patents, trademarks, and copyrights—it also depends on keeping proprietary and client information secure. As innovation moves increasingly into digital environments, data security and privacy have become integral to intellectual property management. Companies that fail to protect customer/user personal data (e.g., name, address, other information that can identify a person), sensitive data (personal information considered “sensitive” such as geolocation, race, or other data defined as “sensitive” under state law), and confidential information shared by business partners, are exposed to risk not only of financial loss but the erosion of trust that supports long-term client and partner relationships. This article addresses all three of those types of data.
The Intersection of Intellectual Property and Cybersecurity
Intellectual property and cybersecurity share a common mission: protecting innovation. Proprietary research, design files, and client information are among an organization’s most valuable assets. When stored or transmitted digitally, these materials can become targets for cyberattacks seeking to gain economic, competitive, or strategic advantage, or to commit identity theft.
A data breach that exposes trade secrets, pending patent information, or client records can have lasting consequences, from legal liability to competitive disadvantage. A data breach of customer/user data collected and used exposes the holder to significant liability under state breach notification and privacy laws, not to mention reputational harm. Collectively, all such data is referred to as “confidential Information.” For these reasons, companies and law firms alike must treat cybersecurity as an essential component of their IP strategy, not as an afterthought.
Growing Threats to Confidential Information
The threat landscape facing IP owners continues to expand. Common risks for failure to protect Confidential Information include:
- Cyber espionage: State-sponsored and private actors targeting technical data and confidential filings.
- Insider threats: Employees, contractors, or partners with authorized access who intentionally or inadvertently leak information.
- Supply chain vulnerabilities: Weak security among vendors and service providers that handle proprietary data.
- Ransomware and phishing attacks: Tactics aimed at stealing or encrypting sensitive files until payment is made.
- Liability for data privacy breaches: Failure to protect the privacy of personal/sensitive data that leads to legal liability.
These risks emphasize that IP security depends not just on legal protections but on technological vigilance and sound governance practices.
Best Practices for Safeguarding All Forms of Confidential Information
An effective data-protection strategy integrates cybersecurity principles with established IP management practices. Organizations should consider the following measures:
- Adoption of security measures based on NIST CSF 2.0 Functions: Govern, Identify, Protect, Detect, Respond, and Recovery, to align cybersecurity efforts with business needs, risk tolerance, and available resources. A mapping of CSF 2.0 and NIST Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations (SP 800 171 Rev. 3) has been posted to the NIST Online Informative References catalog (Sept. 18, 2025).
- Establishment of access control and authentication: Limit access to Confidential Information to only those who need it. Use multi-factor authentication and regularly update permissions.
- Encryption of data at all stages: Apply strong encryption to stored and transmitted data, ensuring all Confidential Information remains protected from interception or loss.
- Conduct regular cybersecurity audits: Routine risk assessments help detect vulnerabilities in networks, software, and devices before they are exploited.
- Train employees and vendors: Provide continuing education on data handling, password security, and phishing awareness.
- Document trade secret protections: Maintain written policies showing reasonable efforts to protect all Confidential Information essential for legal protection under trade secret law.
- Secure all public-facing collaboration platforms: Use verified, encrypted channels for document sharing and communications with clients, outside counsel, and patent offices.
- Develop an incident-response plan: A structured response procedure reduces downtime, preserves evidence, and fulfills breach-notification requirements.
Legal and Regulatory Frameworks
A company’s cybersecurity posture should align with applicable data-privacy laws. The General Data Protection Regulation (GDPR), the parallel Regulation applicable in the UK, and the growing number of state consumer privacy laws (currently twenty-one states have adopted such laws) establish strict rules for managing personal and client information (“Confidential Information”). Additionally, in the U.S, all fifty states, plus DC, Puerto Rico, and all US Territories have Breach Notification laws, which include unique requirements, as well as the GDPR and UK version have similar breach notification requirements. Businesses that may not meet the applicability threshold for any of these listed consumer data-privacy laws may still have breach notification obligations under a jurisdiction’s Breach Notification law, making it important to understand the nuances of the laws to which a business is subject. For IP-driven businesses operating internationally, understanding these frameworks is critical to avoiding regulatory penalties and maintaining trust.
Additionally, laws such as the Defend Trade Secrets Act (DTSA) and the Computer Fraud and Abuse Act (CFAA) provide recourse against data theft and unauthorized access. Integrating these legal tools with strong cybersecurity protocols ensures that both the technological and legal defenses supporting a company’s IP portfolio remain aligned.
Building a Culture of Security
Technology alone cannot protect intellectual property. A corporate culture that values confidentiality, privacy, and compliance is equally important. Regular training, leadership engagement, and accountability measures reinforce this culture and make data protection a shared responsibility across departments.
When organizations build this culture, they not only reduce risk but also strengthen client confidence and enhance the credibility of their IP practices.
The Bottom Line
In today’s digital landscape, protecting innovation means protecting all types of confidential information. The most successful organizations approach intellectual property and cybersecurity as interconnected disciplines, each reinforcing the other. By implementing best practices and maintaining compliance with evolving data-protection laws, companies can safeguard proprietary information, protect client trust, and ensure that their innovations remain secure well into the future.