The Electronic Era has placed information at the fingertips of anyone who has an Internet connection.  From the comforts of your own home, you can research unusual medical maladies, communicate with friends all over the world, or follow your favorite sports team.  We live in a wondrous age.

Unfortunately, the same technology that makes a world of information readily available makes your company's most valuable resources — your intangible assets — susceptible to loss or misappropriation.

We have  previously discussed how intangible assets make up 75 percent or more of the value of a publicly traded company.  That percentage is undoubtedly higher for most privately held companies.  As Alan Greenspan noted, "the economic product of the United States [is] predominantly conceptual."

Your business is no different.  The value of your company is based primarily on the value of your intangible assets, including patents, trademarks, copyrights, trade secrets and other confidential information.

Intangible assets are highly mobile.  Not many years ago, a disgruntled employee had to carry bankers boxes of documents out of your facility; today, he can carry those same documents (and more) on a flash drive.  Most thefts of confidential information are committed by insiders, including disgruntled employees and former employees.

You should be concerned about employees stealing your information.  You should be terrified of losing your information from the actions of careless or untrained employees.  A recent study disclosed these shocking facts:

• One out of every 50 files on file shares and desktops contain exposed confidential data
• One out of every 400 outbound e-mails contains confidential data
• 95 percent of data loss incidents are unintentional, the result of careless or untrained employees, or legacy automated processes.
• 41 percent of all violations contained intellectual property, insider information, or trade secrets
• 58 percent of violations may be subject to review by state and federal regulations
• The average number of data loss incidents per year per employee: 4

Would a former employee benefit from having your customer list when she set up her new business?  Could a competitor benefit from your pricing schedule?  Are you willing to turn over your marketing plans or product designs to a rival company?  All of these types of information are commonly stored in electronic format.  What have you done to protect your most valuable assets, your company's crown jewels?

If you want to protect your intangible assets, you must be constantly vigilant, always aware of the risks to your property.  Develop a comprehensive plan to identify and secure your intangible assets.  Review your plan regularly — at least yearly — to make sure that it continues to meet your needs.

Teach your employees how to protect your intangle assets.  Regularly review their obligations of confidentiality.  Develop corporate policies regarding the use of confidential information and other intangible assets.  Ensure that your employees follow those policies.

Protect your intangible assets and your business will boom.  Fail to do so, and you place your crown jewels at risk.

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Download my new e-book, "Ten Fatal Mistakes That Business Owners Make (And How to Avoid Them)" at http://www.gfrlaw.net/firmpublications.aspx.  The book is free, and you are not required to give any contact information.  Feel free to pass along copies of the e-book to anyone who might benefit from it.  Avoid the Ten Fatal Mistakes, and your business will boom.


Who is Scott F. Gibson?  For 23 years, I have practiced business law in Arizona, the past ten as the managing partner of Gibson Ferrin & Riggs, PLC.  We help Arizona businesses and their owners meet their business and personal goals.  My practice focuses on the intersection between intellectual property law and employment law.  I help businesses prosper by properly managing their trade secrets and other intangible assets. 

You can learn more about me on Martindale Hubbell, Avvo, or gfrlegal.com.  Follow me on Twitter or LinkedIn.