Data theft is a hot topic now, with the recent high-profile thefts at Target and others. This issue has consequences for companies trying to protect trade secrets. For example, if a company is not taking measures to protect against data theft, a court could easily conclude that the company has not reasonably protected its proprietary information, and thus is not entitled to trade-secret protection under the Uniform Trade Secret Act.

Two recent articles in Entepreneur address this problem head on. In “Why Your Small Business Is At Risk of a Hack Attack,” Heesun Wee explains the risks facing small businesses:

Last year, 31 percent of all attacks were aimed at companies with less than 250 employees, according to Symantec’s 2013 Internet Security Threat Report.

But many small businesses do not appreciate this risk:

Smaller ventures are particularly vulnerable because cybercriminals know they likely spend less to protect their digital information and infrastructure. Cheaper security measures also tend to be static, meaning those systems don’t evolve to keep up with criminals’ newest tricks. . . . Roughly 77 percent of small firms believe their company is safe from a cyberattack–even though 83 percent of those firms do not have a written security policy in place, according to the National Cyber Security Alliance and Symantec.

Small businesses need to do more to protect their sensitive data and proprietary information. In “Preventing Another Target Attack,” Eric Basu offers some suggestions for retailers that apply with equal force to many small businesses.

First, you should use network-monitoring software:

There are next generation software solutions that effectively visualize network traffic, break down machine-to-machine connections by service protocols and allow filtering by machine, service or even internet destination. For example, a North American-based retailer using a payment processing partner from the same continent should not see outbound connections from a POS terminal to places like Russia, China or Brazil.  If they do, the connection should be dropped and the security administrator should be notified of the machine initiating the connection.

Second, improve application-level security:

Keeping [software applications] up to date with the latest versions and patches as well as performing penetration tests on both internal- and external-facing interfaces would have gone a long way to preventing the lateral movements the Target attackers were able to pull off in a short amount of time. Companies that develop in-house applications should also ensure they are designed securely from the get go, performing both static and active secure code reviews at every minor release. Furthermore, only authorized white-listed applications should be allowed to run and properly identified.

Many small business do not have the know-how or resources to deal with this issue in-house. In that case, perhaps the most important step you can take is to speak with someone an IT expert to obtain customized recommendations for protecting your business’ sensitive information. Combining up-to-date IT solutions with proactive legal protections gives you the best chance of avoiding a problem in the first place. And it gives you the best chance to mitigate the damage if a breach occurs.

2 Comments

  1. How about getting the employees to sign Data Confidentiality Agreements, getting employees to surrender all network communication devices and stalling chances of theft of data from work stations, disabling the network communication devices in the workstations, fixing accountability-responsibility-liability of one who possesses data, putting control mechanism in place to ensure data of one unit/dept. does not travel to other unit/dept. unless necessary.

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