Use only organization-approved AI services for confidential work, and share the least information needed to complete the task. Before employees submit trade-secret material, the company should review the specific service and plan’s terms, settings, access controls, and contractual protections. A chat interface is not proof that a prompt or upload stays private.
Why AI use can put trade secrets at risk
Trade-secret protection depends in part on keeping valuable information secret through reasonable efforts. The USPTO says information must have actual or potential independent economic value because it is not generally known, derive value from others’ inability to ascertain it through proper means, and be subject to reasonable efforts to maintain secrecy; all three elements are required. See the USPTO’s trade secret policy, updated July 29, 2026.
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A prompt, uploaded file, or connected application can send business information to an AI service provider. The FTC has described customers sharing sensitive or confidential information, including internal documents and user data, with model-as-a-service companies. Do not infer confidentiality from the appearance of a private chat window. Review the service’s actual terms and settings before sharing sensitive material.
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Whether a particular disclosure affects trade-secret protection depends on the facts and applicable law. Sending information to an AI service does not automatically waive protection in every case, but an uncontrolled disclosure can raise a serious question about whether secrecy was maintained.
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Set rules before employees use AI
A practical policy should make clear which tools and data are allowed, rather than leaving employees to guess. Start by identifying information that may be sensitive, such as source code, formulas, product plans, pricing, customer lists, designs, processes, credentials, unpublished research, and confidential partner information. A “confidential” label helps communicate handling expectations, but the label alone does not make information a trade secret.
- Specify the approved AI service, account or plan, and permitted data classes.
- State which integrations are allowed and how employees request an exception.
- Require legal, security, and procurement review before a service is approved for confidential work.
- Set rules for chat history, uploaded files, exports, and deletion.
- Train employees to recognize sensitive information and use approved tools.
For each selected service and plan, check the governing terms and settings for training or model-improvement use, retention, human access, deletion, security measures, and subprocessors. These details can vary by product and plan, so verify them directly rather than relying on assumptions or a general marketing statement. The FTC says providers must honor data-use promises made in terms, promotional materials, and other customer-facing contexts. Its January 2024 guidance is about provider commitments; it does not establish what any particular vendor currently promises.
Where appropriate, put confidentiality and security requirements in writing and plan how the organization will check that the provider follows them. The FTC’s Start with Security guide recommends written security requirements for service providers and follow-up verification.
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- Certified to FIPS 197 - High-level information security standard approved by the U.S. Government
- Brute-Force Password Attack Protection - Data is automatically erased after 6 failed access attempts. The data and encryption key are securely destroyed and the crypto drive is reset
- Auto-lock - The crypto drive will automatically encrypt all data and lock when removed from a PC/Mac or when the screen saver or "computer lock" function is activated on the host PC/Mac
- Secure Entry - Data cannot be accessed without the correct high-strength alphanumeric 8-16 character password. A password hint option is available. The password hint cannot match the password
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Minimize what goes into prompts and uploads
Even an approved tool should receive only the information needed for the task. If an employee needs help improving a query, for example, they may be able to describe the problem without supplying the real customer name, exact figures, full source code, or formula components.
- Replace names, identifiers, and exact values with placeholders when they are not necessary.
- Use abstractions or redactions if they preserve the context needed for the answer.
- Use fabricated or synthetic examples for demonstrations and training when they work as well as real data.
- Do not submit credentials, secrets, regulated information, or another party’s confidential data unless the organization has explicitly approved the use and applicable obligations permit it.
The FTC’s business security guidance recommends keeping only needed data and limiting access to employees and contractors with a legitimate business need. It also describes fictitious data as a way to avoid unnecessary exposure in training or development work.
Check connected tools, agents, and access
AI features may be connected to drives, repositories, enterprise applications, or other services. Treat each connection as another route by which information may be accessed. Before enabling it, determine what the feature can reach and limit permissions to what the task requires. Use role-based access and periodically review who can use the tool and its integrations.
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- Durable dual-layer waterproof design* — Protects the crypto reader from bumps, drops, run-in and immersion in water. The electronics are protected by a hardened internal case. Rubberized silicone outer case provides a final layer of protection.
- Auto-Lock —The cryptographic key automatically encrypts all data and locks when removed from a PC/Mac or when screen protection or "computer lock" is enabled.
- Secure Entry —Data on these flash drives cannot be accessed without the correct alphanumeric password of 8 to 16 characters. A password indication option is available for this flash drive. The hint cannot match the password.
NIST identifies confidentiality, integrity, and availability risks in AI systems and their training and output data. Its AI security and resilience page describes AI-specific control overlays as in development, including for agent use cases; that work should not be treated as a finished certification or a guarantee of safety.
What to verify about an AI service
Ask the provider and review the governing terms for the exact product and plan your organization intends to use:
- Are prompts, files, or outputs used to train or improve shared or customer-specific models?
- How long is content retained, and what deletion controls are available?
- Who can access customer content, under what circumstances, and with what logging or safeguards?
- Do subcontractors or connected services receive the content?
- Can administrators restrict employee access, integrations, and data sharing centrally?
- What confidentiality and security commitments apply contractually, and how can your organization verify compliance?
These are due-diligence questions, not claims about any unnamed provider. The FTC notes that providers’ data-use commitments can appear in product terms, marketing, and other customer-facing contexts, and recommends written provider requirements and verification.
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- New Passphrase Mode: Enhanced security feature allowing users to create longer, more memorable password phrases for easier access without compromising protection
- Dual Read-Only (Write-Protect) Settings: Enables write protection functionality to prevent accidental data modification or deletion when needed
Handle use, deletion, and possible exposure carefully
Review AI-generated outputs before relying on them. Confidentiality safeguards do not establish that an output is accurate or free of third-party rights concerns. Follow organizational rules for chat history, uploaded files, and exports; deleting a visible conversation should not be assumed to delete every provider-held copy.
If someone may have submitted a trade secret to an unapproved service, preserve relevant facts and promptly notify the organization’s legal and security contacts under its incident procedures. Do not promise that a later deletion request restores secrecy.
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The USPTO’s trade-secret criteria support a practical warning: valuable information sent to a service without suitable confidentiality and safeguards may create a problem for the secrecy element. Whether a particular disclosure actually affects protection is a legal question that depends on the facts and applicable law. The USPTO says protection continues without a set time limit only while the required elements persist.
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The FTC has said that AI providers must honor privacy commitments, including commitments about using customer information to train or update models, and has noted that use of competitively significant business-customer data can raise competition concerns. That is regulator commentary on provider obligations and risks; it is not a statement that all AI training on customer input is unlawful.
This guidance focuses on U.S. federal agency material. State and foreign laws, customer and partner contracts, privacy rules, export controls, and sector-specific requirements may also apply. For decisions about a particular disclosure or service, consult qualified legal and security professionals.
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