Frequent consequences affecting company’s leadership…and employees, upon learning they have they have become the victim of intellectual property (IP) theft and/or other variant of economic espionage are what I refer to as ‘shock and convalescence’.
• Shock, frustration, disappointment, and anger are often a company’s initial reactions wherein a company typically endeavors to understand (a.) the how and why this event occurred and (b.) begin to assess its near-term impact – adverse effects to this and other transactions – technology transfer arrangements the company may already be engaged or are under consideration.
• Convalescence, on the other hand, is almost wholly strategic. That is, seek practical consensus for solutions, which may include (a.) exploring various legal strategies and/or (b.) private negotiations to try to recoup some portion of the losses incurred, (c.) structuring future transactions to minimize – mitigate future risks to avoid repetition.
To understand the practicalities of this, we examine last week’s trial verdict…in U.S. District Court (Southern District of Wisconsin) which favored American Superconductor’s (AMSC) whose trade secreted wind turbine technology, i.e., source code, was acquired-stolen from this Massachusetts-based SME (small, medium-sized enterprise) presumably, during-the course of a transaction with Sinovel, a Beijing, China-based wind turbine firm.
AMSC, not unlike other U.S. technology intensive companies, upon learning they (too) had become victims…of IP theft (infringement, misappropriation, etc.) approached their dilemma with the conventional and rather narrow zeal, i.e., ‘let’s find the leaker’. With that, AMSC presumed there must have been an ‘insider’ who possessed practical (working) knowledge of the trade secreted ‘source code’ in terms of how it optimized wind turbine functionality and thuus enabled – facilitated its illegal transfer to the possession of Sinovel.
In the 25+ years I have been engaged in investigative research on a wide range of matters related to economic espionage…and mitigating company’s – institution’s risks. Here, my work focused primarily on reducing vulnerability, probability, and criticality of-to theft (infringement, misappropriation of IP including product counterfeiting. I have largely achieved this through writing, publishing, public speaking, university teaching, and respectful corporate – institution awareness training with special attention to risk origination (who, how, when) and risk mitigation (what, why).
Interesting to me, in the many years I have been actively engaged in these issues; I am unaware of any U.S. company…which has been victimized, whose post-mortem obituary could not have legitimately included the following prominently chiseled on their soon to be forgotten ‘business dissolution’ headstone, i.e., ‘this was a company with a lot of promise’!
Such eulogistic statements seem all-the-more-apt when-if the target-victim company…is an SME (small, medium sized enterprise) versus a Fortune-ranked firm, who presumably may better financially weather a comparable loss. For the former, however, ala SME’s, such circumstances routinely produce not only economic – competitive advantage devastation, but layers of professional – personal frustration and embarrassment, that include implications of naïveté insofar how a transaction was negotiated, executed, and what risk mitigation was being practiced.
To be sure, there are numerous instances in which companies negotiate successful, lucrative, and win-win transactions with foreign enterprises…in which their most valuable intangible assets are in play and remain intact for the duration with no overt evidence of theft, misappropriation, and/or infringement of technology and operational knowhow.
Still, leadership (and employees) of companies which have experienced…significant loss-theft-infringement of strategically key and valuable intellectual properties and intangible assets, understandable reactions are emotion laden. Especially, as the financial realities emerge, often quite rapidly and irreversible – un-recoverable in market space repercussion contexts. Too, pursuing financial – competitive recovery are very costly and time-consuming options which most experienced in such matters assign minimal chances.
Michael D. Moberly April 17, 2018 St. Louis email@example.com ‘Business Intangible Asset Blog’ where attention span and action really matter’!