Everything You Need to Know About Proprietary Information

by  Adv. Rupa K.N  




3 mins


proprietary information


Proprietary information is extremely sensitive information owned by a company or individual that must not be made public. This proprietary information is considered a property because of its importance.

Unauthorized disclosure of proprietary information may result in negative repercussions such as litigation and fines, but it will also result in an economic loss for the owner.

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What Exactly Is Proprietary Information?

Proprietary information is extremely valuable information created by a person or a firm that cannot be shared or exhibited publicly due to its nature. From a business standpoint, this information includes trade secrets, specifics about manufacturing processes, product formulations, business models, innovations, research and development updates, and any other business-related knowledge that has value for the organization.

The manner this proprietary information is maintained is critical, and there are legal ramifications for careless treatment. For protecting your trade-related information, get online legal advice.

Proprietary Information as Intellectual Property

Protecting your company’s data and intellectual property is critical because it prevents other parties from stealing your proprietary information and allows you to maintain your competitive advantage in the market. You may prevent employees from leaking essential company data and ideas to rivals by creating corporate rules and tactics that appropriately safeguard your proprietary information.

Proprietary information, often known as a trade secret, is the knowledge that a business intends to keep private. Secret formulae, procedures, and methods employed in manufacturing might all be considered proprietary knowledge.

It may also comprise a company’s business and marketing strategy, compensation structure, client lists, contracts, and computer system specifications. In some circumstances, an employee’s on-the-job particular knowledge and abilities are deemed confidential information by the corporation.

Are you protecting your proprietary information? Get online legal advice today!

Protecting Trade Secrets

A business has numerous alternatives for keeping its proprietary information private. Key employees who have access to such proprietary information may be required to sign restrictive covenants, also known as confidentiality, nondisclosure, or noncompete agreements, that prohibit them from disclosing that proprietary information to third parties or using it to compete with their employer for a set period of time after leaving the company.

Courts normally enforce restrictive covenants provided they are fair in terms of time and location and do not unreasonably restrict the former employee’s right to work. In certain circumstances, the covenants are only enforced if the employee obtains confidential knowledge while working for the company. A business lawyer might guide you on this more exhaustively.

Additional Ideas about Proprietary Information

Furthermore, it is typically considered unfair competition for one company to convince workers who have developed unique technical skills and secret information at another company to leave and use their talents and knowledge for the benefit of the rival organization. In such a lawsuit, the plaintiff may seek an injunction to prohibit former workers and competitors from exploiting the secret knowledge.

Companies may also design security measures to prevent international or domestic rivals from stealing their proprietary information. Business and industrial espionage is an ongoing operation that seeks trade secrets through illicit means.

How secure is your company's proprietary information? Find out now with our legal guidance.

Proprietary Information as per NIST, USA

Financial data, data or assertions, trade secrets, product research and development, current and future product designs and performance specifications, marketing strategies, plans or tactics, schematics, client lists, computer programs, procedures, and know-how that has been appropriately designated and marked as proprietary by the firm are all examples of proprietary information and material related to or affiliated with a company’s goods, business, or operations. The information must have been created by the firm and must not be accessible to the government or the general public without limitation from another source.

Proprietary Information Protection

It is because your proprietary information is valuable it must be safeguarded against a wide range of internal and external threats. This often necessitates a multi-layered defensive approach suited to your company’s unique operations. Today, dangers may come from practically everywhere, so you must pay attention to your people and processes, as well as shore up any susceptible areas.

The first step is to identify your trade secrets, as well as any other information you need to keep private. This will aid you in determining your security priorities. You can then take necessary actions, such as the following, depending on the nature of the confidential information:


To secure your most important proprietary information from hackers, you should invest in a solid cybersecurity program. This might imply putting in place robust firewalls and authentication processes or depending on a cloud-services provider that can protect against constantly evolving cybersecurity threats. You should also make certain that your personnel understand and adhere to your security rules. A criminal hacking into your system and stealing trade secrets, personal customer data, or other valuable information is one of the most harmful things that can happen to a corporation.

Access Control

Depending on your industry, you may be able to restrict physical access to your facilities to workers and authorized guests. Access restrictions at a data center or executive office suite may be considerably more stringent. CRM solutions, for example, may be configured to block employees from accessing private data. For example, a salesperson may have complete access to proprietary information about her own clients but not to customers of other reps.

Internal Security

To prevent proprietary information breaches, keep your laboratories, manufacturing spaces, conference rooms, and executive offices safe. This might include installing automatic door locks when someone leaves the area, tinting windows, or adding security measures to communications equipment in these places to prevent illegal recordings.

Nondisclosure agreements (NDAs)

Many firms utilize written nondisclosure agreements (NDAs) to prevent workers from disclosing confidential and proprietary information while working for the company. Before accessing your company’s data, suppliers, outside sales agents, and other business partners may be required to sign NDAs.

Noncompete agreements

A non-compete provision in an employment agreement forbids a former employee from exploiting private knowledge in a competing job. For example, you wouldn’t want a sales manager to quit your firm on a Friday, spend the weekend with your top rival, and then contact your best accounts on Monday.


Companies should ensure that their covenants are acceptable in terms of both time and place. Otherwise, a court will not enforce them and will not limit the former employee’s unjustified limitation of his or her right to choose a new work. 

They should also verify that any workers who expose trade secrets have signed some type of confidentiality agreement, or else a court may not protect that small business’s trade secret and proprietary information.

Proprietary Information is valuable; it must be safeguarded against a wide range of internal and external threats. Hence, multi-layered defensive approach. To know more about this, get online legal advice.

Adv. Rupa K.N

Adv. Rupa K.N


5 | 277+ User Reviews

Advocate Rupa K.N, with over 24 years of independent practice, specialises in providing legal expertise, advice and guidance to a broad range of customers. Having been practising law independently for several years after doing her B.A. LLB from Bangalore University and PGDM from the National Institute of Personnel Management.

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