In many cases, a company’s Intellectual Property (IP) assets, such as its patents, copyrights, trademarks and trade secrets, constitute the most valuable assets on the company balance sheet. To be sure, protecting the most commercially valuable of these IP assets is critical to establishing and maintaining a company’s marketplace advantage.
Important as they are, these forms of IP are not our focus here. Instead, our emphasis will be on an often overlooked, but no less important, form of IP: confidential information.
Although definitions of confidential information vary, a working definition is any information about a business that is not generally known to the public. Confidential information may be classified as being eligible or ineligible for trade secret protection. Confidential information eligible for trade secret protection may create potentially valuable IP, a classic example being the Coca-Cola formula. On the other hand, confidential information ineligible for trade secret protection may still be very important to the company. Specifically, confidential information, whether protected as trade secrets or not — disclosed legitimately, such as in litigation discovery, or illegitimately, such as when stolen or leaked — can cause irreparable harm to the company, particularly when care is not taken with respect to the creation and protection of such confidential information.
So, what are we talking about? We’re talking about company communications that have been recorded and may, therefore, be discovered or otherwise disclosed outside of the company. Recklessly created communications, whether written or spoken, can in the wrong hands create havoc for the company. Therefore, our goal is to set forth guidelines for consideration on how a company communicates, both internally and externally. A prudent company will use these, among other guidelines, to educate its personnel on how to communicate clearly, effectively and with great care.
Whether a company communication is intended for internal or external distribution, employees should be trained so that all their communications pass muster with respect to:
The Management Rule — IIf they would be uncomfortable having their written communication published for review by management, they should not write it down.
The Evening News Rule — If they would be uncomfortable having their written communication broadcast on the evening news, they should not write it down.
These rules pertain to all communications, which may include a letter, an email, a text, a tweet, a website post (e.g., a blog entry, a comment on a published story, a Facebook/LinkedIn/social media update), a search engine query, a voicemail message, an instant message and the like.
It’s important to remember also that, although our focus is written communication, spoken communication should similarly be made with great care. This was the point of the World War II admonition “Loose Lips Sink Ships,” which meant beware of unguarded talk. Similarly, in As You Like It, Shakespeare wrote, “All the world’s a stage, and all the men and women merely players.” In other words, employees should be trained to recall these teachings and understand that they are on stage all the time. Whether an employee is at work or elsewhere, someone could be listening and recording what they are saying, and that eavesdropper likely will not serve the company’s best interests.
Supplementing the above general guidelines, the following enumerates several additional recommendations concerning written commutations:
Communication Marking: Communications should be marked privileged and confidential when they are intended to be so, and especially if they relate to legal advice, thus identifying such sensitive information for appropriate handling and care.
Attorney CC: The assumption should not be made that copying a lawyer will make a communication privileged or protect it from other eyes; in fact, no lawyer should be copied unless there is actually a business reason for doing so. For the attorney-client privilege to apply, communication must be for the purpose of obtaining or giving legal advice. An email that does not relate to legal advice is not privileged.
Protect Privilege: Privileged communications should not be forwarded to persons outside the company. Forwarding a lawyer’s advice on to a customer, a supplier, or other person outside the company will likely waive privileges for that communication and could waive privileges for the entire subject matter of the communication.
Protect Confidentiality: It should be a policy to not include any company confidential information in communications outside the company, unless an NDA is in place. Three important reasons are: 1) sending confidential information outside the company likely will mean the information is not a trade secret and is no longer confidential; 2) sending business-sensitive information about any publicly traded company or its products or business to persons outside the company could violate federal and state securities laws against trading on insider information; and 3) sending business-sensitive information to anyone outside the company could result in competitors obtaining the information.
Whole String: In email conversations, one should read the entire string before forwarding an email, to ensure that the entire string is appropriate for the new recipients. Similarly, before a reply is sent to “all” or to a group, it’s important to double check that it is appropriate for all recipients to receive the communication.
Focus: One should stick to the business purpose of the communication. Obviously, setting a friendly tone in a communication is appropriate, but it is best to generally aim to keep business communications business-focused.
Illegality Out: All personnel should take care to not create or send a writing on topics or information that would show or even suggest illegal activity. It should be noted that agreements with competitors regarding pricing may be illegal, as may payments or gifts to others for the purpose of obtaining business.
Not Mission Impossible: Terminology should be avoided that suggests the communication is improper: “Destroy after reading,” “delete immediately after reading,” etc.
Keep Clean: Negative or potentially embarrassing personal issues should not be included in communications. Obvious examples are a paragraph on last night’s bar and gentlemen’s club visits with the customer.
Emotion Out: One should avoid sending communications, particularly emails, while angry or otherwise emotional. It is wise to pause, wait 5–10 minutes, and re-read an email written while emotional, before hitting the send button. (It may feel good in the moment to write, “YOU ARE A WORTHLESS PIECE OF @#!* AND I AM GOING TO DESTROY YOU,” but repercussions would be long-lasting and possibly irreversible.)
Bias Out: One should avoid using language that is offensive or that reflects improper bias or a lack of cultural sensitivity. Reference should never be made to certain groups (whether based on race, ethnicity, gender, religion, sexual orientation, age, etc.) as [insert slur].
Secure Network: Company confidential information should not be sent or stored on or through unprotected devices or means.
Smart Assumptions: It is wise to keep in mind the following smart assumptions:
Do assume that business communications are not private, can be read by others in the company, and could be obtained and read by others in the event of litigation or administrative or regulatory investigations.
Do assume that all electronic communications are preserved and can be retrieved.
Do assume that business communications on personal devices (e.g., cellular phones, blackberries, laptops, tablets, etc.), or on social media, are subject to discovery and can be retrieved and read by others.
Document Retention: Physical or electronic documents should not be deleted or destroyed except in accordance with the company’s document retention/destruction policy or standard practice. If told the company is about to be sued, leadership and employees alike should contact Legal before deleting anything.
In conclusion, while a company’s IP assets — its patents, copyrights, trademarks and trade secrets — are valuable assets, a company’s confidential information, when created without care and disclosed outside of the company, can create havoc for the company. So, it is indeed the wise company that trains its personnel to communicate with great care, as one never knows when today’s seemingly insignificant communication will someday become not so insignificant.
A.J. Moss is a partner at the law firm of Squire Patton Boggs. He acquires, licenses and enforces rights in all forms of intellectual property including patent, trade secret, trademark and copyright. He has obtained both U.S. and non-U.S. patents in technical fields such as avionic systems, semiconductor device fabrication, chemical-mechanical planarization systems and techniques, semiconductor packaging systems and techniques, computer hardware systems including microcontrollers, memory and radio frequency identification tags, computer software including business method patents, and medical devices. He has been involved in several patent litigation matters involving patent infringement and validity determinations in federal court and before the International Trade Commission.
As a former nuclear submarine officer in the US Navy, Moss gained experience in a variety of complex electronic communications systems, as well as in nuclear power plant operation and electrical power generation systems.