Business Leader Reactions to Theft of IP

Michael D. Moberly, Principal, Founder, kpstrat

The leadership of any business, organization, or service provider, which…

  • holds (proprietary, intangible, operational) economic + competitive advantages and
  • is more reliant on same for revenue generation + valuation (irrespective of sector),
  • along with their investors, lenders, employees, and myriads of other stakeholders,

are obliged (fiduciarily, and otherwise) to consider…

1. if – when particular (proprietary) intellectual, structural, relationship, operational, and cultural capital (intangible) assets and/or issued IP (intellectual property)

  • have been misappropriated, infringed, and/or the assets’ value – competitive advantage maliciously questioned – undermined, its likely adverse the holder will experience adverse economic consequences, e.g.,
  • relevant customers – clients – contracts may be negated, employees may be laid off, particular-products and services may be withdrawn, curtailed, or require modification, with immediate affect to revenues + reputation
    • near term + strategically, portions of which will be un-recoupable.

2. valuable + competitive advantage producing – delivering (a.) intellectual property (IP) and (b.) other (forms, contexts, applications of) intangible assets, i.e., (proprietary) intellectual, structural, relationship, and (business) operating culture capital

  • routinely attract-the-interest of – are coveted by and surreptitiously acquired by economic – competitive advantage adversaries-competitors, and routinely,
  • infringed, misappropriated, replicated, and
  • applied elsewhere, irrespective of origin or sector,
  • by curious economic – competitive advantage adversaries and/or various influencers or surrogates operating globally and predatorially.

3. whenever business leadership are apprised that such risks to intangible assets are present – have materialized and are likely to cascade (adversely) enterprise-wide…

  • mere public expressions of disappointment, disillusionment, and deplorability (for the suspected culprits) is seldom sufficient,
  • as are ‘wishful’ expectations (the risk) outcomes will miraculously dissipate and competitive advantage – revenues will return to pre-risk stages, and that
  • years of diligent – methodical work, goodwill, relationship capital, and forward momentum will quickly return after having been maliciously set adrift, being undermined (potentially irreparably).

should prompt prudent review + actions which are (fiduciarily) essential…

4. experientially, doing otherwise will likely elevate – exacerbate if – when civil or criminal responses (actions) are contemplated by the rightful developer – holder of the assets…

  • presumably undertaken to regain economic – competitive advantages, reputation, customer/client goodwill, and lost business opportunities,
    • relative to a hoped for legal judgement, i.e., fine, and/or restitution,
  • but, even then, business leaders–asset holders of the aggrieved assets are again, obliged to factor ‘probabilities’ of returning-to-a-state-of-operational normalcy are unlikely to be imminent absent significant expenditures + time for adjustment.

Thus, it is important, when a business experiences a loss-of-use – malicious undermining of their most valuable, revenue generating, and competitive advantage producing (intangible – IP) assets, they are obliged to seek – demand…

  • how + why the loss(es) occurred – how-why the risks emerged + materialized absent mitigation.
  • motives held by presumed adversary, and
  • assess the near-term impacts – adverse effects (criticalities) to their business, should – when similar-same risks re-emerge, which its likely they will…

by examining other, previous, pending, and pending transactions – technology transfers, etc., contemplated, under negotiation, and/or being executed relative to their vulnerability-probability-criticality to similar risk to devaluation – competitive advantage undermining.


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