If you own the building that houses your business, the company has a tangible asset. The same applies to your equipment, vehicles, and computers. However, even small companies own and use assets that lack physical form. One of the most important is proprietary information.

Proprietary properties and other assets include:

  • patents
  • trademarks
  • copyrights
  • contractual agreements
  • licenses and certifications
  • company database
  • customized business software
  • client lists and client relationship management (CRM) software
  • technical specifications
  • testing metrics

The list goes on, but it’s clear that your company has invisible assets – assets that have value to competitors, and assets that should be protected.

Check with your attorney to see if you need to protect products or inventions with patents, or to get your brand or slogan trademarked or copyrighted. Click here for a NevadaSmallBusiness.com article about copyrights, trademarks, and patents.

Proprietary Vulnerabilities

Your company’s intellectual assets may be exposed internally and externally.

Internally, an employee may have access to proprietary company assets that can be downloaded, making that unhappy employee a better candidate for a job with the competition. For this reason, proprietary information should be protected by limited access, on a “need-to-know” basis. Passwords to access proprietary information should be bulked up (see below) and changed often.

Externally, hackers are adept at accessing proprietary properties through common hacking tactics. For example, “dictionary software” may be surreptitiously attached to your password-protected accounts, generating millions of random letter strings until it finds your password.

Solutions to internal and external threats include:

  • Beef up passwords with numbers and symbols that won’t be recognized by “dictionary software” hacking.
  • Change passwords frequently.
  • Change passwords before terminating an employee with access to valuable data and information.
  • Assign a separate password to each employee who has access, to track which employee accessed what data, when and why.
  • Update your security software at the office level and at the web host level.
  • A shared hosting account may leave your website more vulnerable to hacker attack. Consider a private host server for higher levels of protection.
  • Sync up your office-side security software and hardware with the security software provided by the website host. The best web hosts employ multiple, redundant layers of security that work to your advantage when it comes to external hacker threats.

Offline Security

In addition to the threat of digital data theft, your company’s business is also threatened in the real world. For example, a thief in a custodian’s uniform can slide an unlocked laptop into the trash bin and exit quickly.

  • Lock down all computers.
  • Use keycards, bio-metrics, “smart doors” or other advanced technology to access “eyes-only” proprietary company information.
  • Within many industries, employee contracts are the norm to protect the company’s intellectual properties. Have your legal counsel draw up a sound agreement, signed by all new hires, to protect the intellectual properties that grow your business.
  • Add a non-compete clause to the employee agreement. A new hire may spend a couple of years learning how to deliver at your company’s levels, then go out to start his own, competing company. A non-compete clause can help protect against this practice for a specified number of years.
  • Anyone who is given access to proprietary company data – even for a short time – should be required to sign and honor a non-disclosure agreement. Again, talk to the company’s legal advisor to draw up an NDA with teeth.
  • Back up key data off-site. If there were a fire, flood or other calamity, and all your proprietary properties were stored on the server floating by, you’d have a problem.
  • Use a “cloud-based” data storage service so you can download key data as soon as you’re back online. Choose a company that employs several layers of security. Because hackers know these services store a great deal of sensitive data, they’re targets for more sophisticated hackers and crackers.

You may not be able to see the proprietary assets owned by your company, but these assets can grow your business to profitability faster. Start by taking an inventory of your proprietary properties – the information you want to protect from competitors. Then. design a system that limits your exposure to external and internal threats.


The information provided is presented for general informational purposes only and does not constitute tax, legal or business advice. Any views expressed in this article may not necessarily be those of Nevada State Bank, a division of ZB, N.A.