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I am using Windows 2003 server as OS, is there any option to give users only Read and Write access. I don't want users to copy the file or move the file or attach the file in any mail. As the file is an very confidential. Is there any way to do so??

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If you have the ability to read and write you have the ability to make a copy. In order to protect a document against unauthorized reproduction (but allow read /write access) you need to have a file format (like office file formats) that supports DRM and a DRM server. Windows Rights management service provides that functionality. You need a Windows RMS Client Access License (which you may already have depending on your CAL type) See Installing Windows Rights Management Services with Service Pack 2 Step-by-Step Guide

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Even a DRM server is a false sense of security - if people can read the file then they can copy it no matter what. You may as well either trust certain people and restrict copying through policy or hold the data on physically secured media with supervised access. –  JamesRyan May 12 '10 at 16:01
    
I suppose if you consider that you could take a photo of the screen then yes you could copy it or worse yet you could actually memorize the text. By your logic the only way to secure any data is to shoot the users afterward, which in quite a few cases would also solve a few other problems, however the subsequent HR mess would render the solution unfeasable, no user is worth that much paperwork. –  Jim B May 12 '10 at 16:41
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