Halliburton Co. has a lot of information it considers confidential–and it wants to keep it that way. Like many companies, the energy giant's success is dependent on keeping secrets, from financial data to IP.

To ensure this information stays under lock and key, Ron Perkowski, senior counsel at Halliburton, is turning an eye toward digital rights management (DRM).

“With this technology we could put a limited number of views on an electronic document, or we could even put a tracker on there so we know who looked at it,” he says.

DRM, also referred to as information rights management, is a type of software used to restrict access to and usage of information, especially copyrighted materials. The technology is more than a decade old but is just now seeing its debut for legal applications.

What propelled DRM into the legal spotlight was the new Federal Rules of Civil Procedure, which codified that electronically stored information is discoverable. Now that companies must produce electronic documents–some of which are very sensitive–in native format to outside parties, it's more crucial than ever to find ways to track and control the use of electronic information.

“Companies are tired of being at the mercy of the end user of a document, and so they're looking to control their information through its lifecycle,” says Brad Gross, chair of Becker & Poliakoff's business technology law group. “The ability to stop leaks has been the Holy Grail. DRM presents a viable and efficient way to accomplish those goals.”

Protecting IP

DRM gained popularity in the early 2000s when Apple used it to stop users from duplicating copyrighted songs they bought on iTunes. Programmers quickly realized the potential advantages of applying this technology to other kinds of electronic information. Now they use DRM to protect documents, as well as the media files the technology had historically been associated with.

This is good news for in-house counsel, who dread turning over sensitive documents during discovery. Now with DRM, counsel can protect sensitive information even after the documents leave the company.

“Attorneys know they have an obligation to produce confidential documents, and knowing that they have additional methods of protection might ease some of the angst associated with producing these things,” says Chris Kruse, president and CEO of CaseCentral, an e-discovery solutions provider. CaseCentral recently launched the first discovery solution that incorporates DRM technology– the CaseCentral Discovery Lifecycle Management platform with information rights management.

CaseCentral's software allows attorneys to assign security controls to documents by selecting from a list of 15 parameters. Once the user selects those parameters, the software puts the document into an encrypted envelope and sends it to CaseCentral's servers. If the lawyer decides to send that document to opposing counsel, that person's computer will establish a connection with CaseCentral's servers when that attorney opens the file. CaseCentral will then check and enforce the controls associated with that file.

“You can set it so the opposing party can't print a certain document, or you can make documents time sensitive so that they'll automatically become inaccessible at the end of a matter,” Kruse says.

Empowered with the confidence that confidential information won't be made public, experts predict companies using DRM will have less anxiety about taking matters to trial.

“Many cases are settled on the basis that companies come to the understanding they're going to have to disclose confidential documents,” Gross says. “Now with DRM, they can take comfort that their trade secrets won't be divulged.”

Authentic Files

Ensuring that confidential documents don't get disseminated across cyberspace during production may be one of the main uses of DRM in the legal marketplace, but it's not the only use.

Another role that DRM can fill during e-discovery is authentication. Under the amended Rules of Civil Procedure, producing parties no longer can turn all documents into a static format such as TIFF or PDF. They now must produce documents in native format. That means a producing party must hand over an Excel spreadsheet as an alterable document, opening the opportunity for unscrupulous opponents to alter evidence to their advantage.

To prevent this, DRM can attach digital fingerprints to documents. These digital fingerprints are basically unique serial numbers assigned to each file.

“Counsel can compare the fingerprint of a document at trial to the original document,” says Kevin Schick, chief operating officer of Vincera Inc., a data security solutions provider that uses DRM. “If the fingerprints match, you know the document has not been altered.”

Because DRM is basically a foolproof method of proving authenticity, litigants that use the technology will face fewer challenges to having documents admitted as evidence.

“When a court is confronted with a DRM-equipped document, there will be no viable argument against its authenticity,” Gross says. “This means the authenticity of a document will begin to be less of an issue in litigation.”

Legal experts speculate there could be even more uses for DRM technology. For example, employers could put controls on key documents to thwart employee theft. That's an area that Perkowski is especially interested in.

“We're not just interested in DRM for e-discovery purposes,” he says. “We're interested in DRM period. Protecting our IP when an employee leaves is a major legal issue in the IP field. We'd really like to find a way to limit the access and distribution of our own information internally without having to attach any sort of disruptive controls on it.”

Facing Flack

Before making the decision to invest in DRM technology, legal departments should consider its cost, which varies greatly depending on the size of the project. Both CaseCentral's and Vincera's solutions can range from a few thousand dollars to more than $100,000.

But that's not the only consideration. Plaintiffs' attorneys will likely fight tooth and nail against the use of DRM-protected documents, claiming the technology is invasive.

“Because DRM can allow you to monitor the usage of documents, plaintiffs' attorneys may claim you're capturing their work product because you can see what they're interested in,” Perkowski says. “I would certainly object to it like crazy if I was a plaintiff.”

If opposing counsel raise such objections, lawyers may have to convince courts that DRM should be allowed.

“Judges will be lost,” Gross says. “Courts are going to have to be educated. That's going to be a tedious hurdle to overcome, but it will have to be done for the true value of DRM to be realized.”