Intellectual property (IP) theft costs U.S. companies up to $600 billion annually. While the headlines often focus on counterfeit goods or corporate espionage, many organizations face a quieter threat: accidental exposure of IP by employees who don’t recognize what they’re handling.
The compliance risk here is not just external—it’s internal. And it’s preventable.
Many organizations assume their employees understand what intellectual property is and how to protect it—but in practice, that’s often not the case. Employees are typically better at responding to clear, high-risk situations—like reporting a suspicious request for confidential information—than they are at recognizing less obvious forms of intellectual property in their day-to-day work.
That’s where the real risk lies. If employees can’t confidently identify what qualifies as IP—whether it’s a product design, pricing model, or internal playbook—they’re far less likely to handle it with the necessary care. And if they don’t know something is valuable, they won’t think twice before sharing it in a presentation, dropping it into an external generative AI tool, uploading it to a public folder, or taking it with them when they leave the company.
Helping employees close that awareness gap is a critical step toward building a stronger, more proactive culture of IP protection.
Most employees know not to copy a competitor’s branding or share company secrets on social media. But IP includes a wide range of non-obvious assets, like:
And while they may be familiar with IP that has more formalized or obvious protection, like patents, copyrights, and trademarks, they may be less familiar with how to recognize and protect IP like trade secrets, which can be equally–if not more–vulnerable and valuable.
Waiting to defend these assets through legal channels is risky and expensive—and certain behaviors can immediately and irrevocably invalidate protection, no matter what steps are taken later. Prevention is a far more effective (and affordable) strategy.
When employees encounter sensitive information, they need more than gut instinct to guide them. That’s where a data classification matrix becomes essential.
Encourage employees to actively use your organization's data classification matrix whenever they create, handle, share, or store information. This matrix should clearly define categories such as public, internal, confidential, and strictly confidential, along with specific handling rules—such as where each type of data should be stored, who is allowed access, and when encryption or restricted sharing is required.
To operationalize the matrix effectively:
This simple step can:
✅Prevent accidental data leaks
✅Reinforce good decision-making habits
✅Help employees feel confident navigating gray areas
While every employee should understand how to classify and protect information, those who manage systems and control access—such as IT admins, records managers, and data owners—need deeper, role-specific guidance. Ensure they receive tailored training that connects the matrix to permission settings, audit trails, and incident response plans. Regular communications and refreshers will help them maintain strong controls and uphold your organization’s data governance policies at a systemic level.
Respecting intellectual property isn’t just about safeguarding your company’s assets. It's also about avoiding misuse of others’ IP. Whether intentional or accidental, an employee misuse of IP that belongs to others can lead to legal liability and reputational damage.
Intellectual property training should address both sides of the coin—protecting your own and respecting what belongs to others.
Not all intellectual property risks come from cyberattacks or careless emails—some of the most significant losses occur when employees leave the organization, whether they’re poached by a competitor or make a voluntary career move. In many cases, these employees aren’t malicious—they’re simply unaware that the knowledge, documents, or templates they’ve created or used on the job are considered proprietary and cannot go with them or be used for another employer.
To reduce the risk of IP loss during transitions:
This proactive approach helps protect your organization’s most valuable ideas and reinforces ethical expectations from day one through an employee’s last day.
The most effective training programs create more than just awareness—they build instinct. Scenario-based learning allows employees to practice identifying and handling IP issues in context, rather than memorizing a list of rules.
Your training should help employees:
When training reflects real-life situations and decision points, employees are better prepared to respond confidently and correctly when it counts.
Use training analytics to pinpoint where employees struggle—whether it’s identifying IP, choosing the right action, or applying classification standards. These insights can help you tailor follow-up messaging, reinforce policies, and spot emerging risks.
Beyond training data, track operational metrics like the number of reported IP incidents or potential breaches. A drop in substantiated issues following targeted training is a strong signal that it’s working.
Protecting IP isn’t just an IT or legal issue—it’s a day-to-day decision for every employee. Make sure they’re equipped with the tools, training, and clarity to do it well. A strong IP compliance program, reinforced with a practical data classification matrix, helps ensure your organization’s most valuable ideas stay exactly where they belong.
This post was updated on 26 April 2025 to reflect new insights and industry updates.