IP (Intangible) Asset Theft-Loss: Sobering Business Realities!

Michael D. Moberly    April 11, 2012

Let’s be clear, I am not advocating a protectionist view here.  I am however, a strong proponent of Article I, Section 8 of the U.S. Constitution that states (paraphrased), ‘if one invents a new product and/or technology, etc., and has been issued a patent, trademark, or copyright by the U.S. Patent and Trademark Office (USPTO) they, and only they, should reap the economic benefits from their efforts’.

Once IP has been issued, the holder essentially has the sole responsibility for sustaining the much coveted exclusivity and executing the necessary protections, which frankly, are dependent on numerous factors, but primarily whether the IP holder:

  • consistently engages in best practices to effectively safeguard their IP, and
  • has the resources to consistently monitor  and aggressively (legally) pursue any attempts to misappropriate, infringe, or steal their IP.

A very relevant business reality for IP holders to consider is that not all cultures, countries, or individuals embrace or interpret the largely western dominated view regarding IP exclusivity.

For example, in McAfee’s (2009) report titled ‘Unsecured Economies: Protecting Vital Information’, the subject matter experts who responded to the survey agreed (not surprisingly) that if an enterprise (country, company, organization, etc.) can (illegally) appropriate R&D for example, at minimal cost compared to legitimate competitors and then go on to produce a comparable product (albeit it a product developed from infringed IP) at a far lower cost, basic economics dictate that the manufacturer of the (infringed) product will, in fact, win space in the marketplace.

Thus, the global incentives for state sponsored, companies, or individuals to engage in industrial – economic espionage, i.e., appropriate others’ intellectual property, remains high, particularly in markets (countries) where:

  • there are few, if any, well established brands and corresponding consumer (brand) loyalty, and
  • there is an abundance of ‘legacy free players’ (Thomas Friedman) in which private property ownership remains a relatively new concept as does the ownership of intellectual property..
  • the business transaction environment is ultra-aggressive, competitive, predatorial, and winner-take-all.

While the realities conveyed above are well understood within the information asset protection community, there remain a significant number of companies that express an attitude of dismissiveness, not only about IP risk, but developing effective policies, procedures, and practices to mitigate this global and costly reality.

Too, many companies still do not have an integrated (enterprise-wide) approach to address the persistent challenges associated with IP theft, infringement, and/or misappropriation, which minimally requires…

converging the expertise of information asset protection, HR, IP counsel, IT security, risk management, marketing, and R&D as a starting point to address c-suite fiduciary responsibilities for ensuring control, use, ownership, and value of a company’s intangible (IP) assets are sustained for the duration of their respective value and functionality cycle.

 Of course, to achieve this on any semblance of consistency, it’s absolutely essential today that:

  • there is an on-going dialogue among a company’s various professional disciplines regarding risk to IP assets
  • each disciplines’ perception of (IP) risk will be recognize
  • consensus is reached on what actions (policies, procedures, practices, etc.) are necessary to prevent, deter, and/or mitigate the risk.

While visiting  my blog, you are respectfully encouraged to browse other topics/subjects (left column, below photograph) .  Should you find particular topics of interest or relevant to your circumstance,  I would welcome your inquiry at  314-440-3593 or [email protected]


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