August is National Inventor Month. You don’t need to be an engineer or mad scientist to sit up and take note. The suit filed last week by Apple against Paul Shin Devine, a global supply manager, reminds us of what makes inventions tick and how it connects us all to the success of our employers.
How is that? Well, Mr. Devine was involved with purchasing components for Apple’s iPhone and the suit filed against him alleges he was taking bribes and kickbacks from Asian suppliers who received confidential information from him sent through his personal e-mail accounts. The complaint further alleges the suppliers used that confidential information to submit winning contract bids.
When you think about it, confidential information is at the heart of every invention. Confidential business information is also available to more than just inventors. Indeed, confidential information of one kind or another is at the fingertips of almost every employee in your company.
A survey of attendees at Infosecurity Europe, a techie confab held in London last April found that, like Mr. Devine, more than two-thirds of those surveyed had sent confidential company information through their personal e-mail accounts rather than company sanctioned channels. But, unlike Mr. Devine, there is no indication that it was done for anti-competitive purposes. Instead, many cited a convenience factor and how the limitations on attachment size imposed by company e-mail systems hampered their communications.
A third of those surveyed sent sensitive information through their e-mail accounts every day and 40% admitted doing so to avoid an audit trail. They wanted to avoid disclosing what was sent to whom.
You know that if IT is engaged in such practices that employees in other parts of the company must be doing it too. Transmitting confidential information through unsecure communication channels dramatically increases the likelihood that confidential information can get lost or leaked to unauthorized parties. When that happens the company can be exposed to unwanted liability on several fronts:
1. Customer data and financial information, for example, are among the items the survey participants confessed to transmitting via personal e-mail. If such information falls into the wrong hands it could lead to identity theft. Credit card information, social security numbers, and bank account information are protected by privacy laws in many states. The willy-nilly handling of such information is therefore a serious problem.
2. In the product development area, for example, the casual sharing of information can give competitors information they can use against you. It can also lead to the loss of patent rights. The U.S. has a quirky statutory provision that requires patent applications to be filed within one year of an invention becoming “public.” If something leaks out inadvertently you might not know the one-year clock is ticking and if you fail to file for U.S. patent right before the year is up your patent rights are lost forever. Transmitting confidential information over a personal e-mail network can thereby undermine your company’s R&D investments and destroy your competitive advantage.
So celebrate National Inventor Month by keeping your confidential business information C-O-N-F-I-D-E-N-T-I-A-L. Revisit arbitrary e-mail attachment size restrictions and make it easy for employees to use secure company networks for transmitting sensitive information. And most of all, remind everyone how confidentiality protects not only the company’s competitive edge, but the jobs the company has created.
Hanna Hasl-Kelchner is a business attorney, author and speaker who provides clear legal insight to enhance business performance. She wrote The Business Guide to Legal Literacy: What Every Manager Should Know About the Law and forthcoming How to Turn Your Business into a Litigator’s Chew Toy: Taking the Bite Out of Legal Liability.