Artificial intelligence presents both opportunities and risks for businesses. While it drives innovation and efficiency, it also creates vulnerabilities for intellectual property. Companies invest heavily in proprietary technologies, designs, and processes, only to find that AI systems can expose or replicate these assets. Protecting IP in the AI era requires a proactive strategy that combines legal protections, strict oversight, and employee awareness to prevent AI from becoming a liability.
Leverage Trade Secret Protections
Unlike patents, which require public disclosure, trade secrets remain protected through confidentiality. Companies like Coca-Cola and Google safeguard their most valuable assets this way. Businesses should classify critical IP as trade secrets, enforce strict access controls, and require nondisclosure agreements to prevent unauthorized use. However, once proprietary data enters an AI system without proper safeguards, its trade secret status may be lost. To prevent this, companies must set clear guidelines on AI usage, restrict the exposure of sensitive data, and ensure any AI tools they use follow strict security protocols.
Vet AI Tools and Providers
AI systems trained on vast datasets can unknowingly absorb and reproduce proprietary information. This concern is amplified when dealing with AI platforms developed in regions with weaker IP protections. DeepSeek, a language model developed in China, has raised concerns about jurisdictional oversight and data security. Companies working with global AI providers must scrutinize data-sharing agreements, limit interactions with tools that lack transparency, and avoid exposing critical IP to systems with uncertain governance. Strong contractual protections and clear internal policies can prevent unintentional data leaks that competitors or state actors could exploit.
Train Employees to Minimize Risk
Even the strongest legal protections can be undermined by human error. Employees often unknowingly introduce risks by entering proprietary data into AI tools or using AI-generated outputs without verifying their security. Businesses must train employees on best practices, such as avoiding inputting sensitive information into AI systems, recognizing red flags in AI-generated results, and understanding the potential consequences of an IP breach. Regular training sessions, clear internal policies, and real-world case studies can help reinforce these best practices.
Actionable Takeaways:
- Classify critical IP as trade secrets and enforce strict access controls.
- Vet AI vendors and avoid tools with unclear data security policies.
- Establish clear AI usage policies to prevent unintentional data leaks.
- Educate employees on IP risks associated with AI.
- Regularly review AI-generated content for potential IP exposure.
With AI rapidly evolving, companies must take active steps to secure their intellectual property. Tangibly helps businesses implement structured trade secret protections, ensuring their most valuable information remains protected in an AI-driven world.
