Theft Of Trade Secrets and Proprietary Know How: A Sobering Business Reality!

Michael D. Moberly     May 14, 2009

This post is not advocating a ‘protectionist’ view nor is the author advocating government protectionist policies be enacted.  The author is however, a strong proponent of Article I, Section 8 of the U.S. Constitution that states, quite clearly, ‘if one invents/innovates, they should reap the economic benefits’.  That is, presuming of course, they (a.) have abided by the relevant laws and best practices insofar as protecting their intellectual property, and (b.) are monitoring and have the resources to aggressively pursue most any and all attempts to misappropriate, infringe, and otherwise steal the intellectual property.

Perhaps the most important reality to consider with respect to intellectual property is that not all cultures, countries, or individuals embrace or interpret the largely western view of intellectual property, notwithstanding that it is a requisite for WTO membership.

For example, in McAfee’s recently released study ‘Unsecured Economies: Protecting Vital Information’, the study’s respondents and experts agreed (not surprisingly) that if an enterprise (country, company, organization) can appropriate R&D at minimal cost compared to its competitor and then go on to produce a comparable product (albeit it a counterfeit) at a far lower cost, basic economics dictate that the (counterfeit manufacturing) company will win space in the marketplace.

Thus, the incentives to engage in industrial – economic espionage, i.e, appropriate others’ intellectual property, are high, particularly in developing markets (countries) where there are few, if any, well established brands and corresponding consumer (brand) loyalty.

While the realities conveyed above are long understood among the information asset protection community, there remain a significant number of companies who have yet, or are dismissive about developing an effective, on-going response to this global and extraordinarily costly reality.  What’s more, many, if not a majority of companies, still do not have an integrated (enterprise-wide) approach to address the problem of IP and/or trade secret theft which minimally requires…

    – the convergence the expertise of information asset protection, HR, IP counsel, IT security, risk management, marketing, and R&D…

    – to ensure control, use, ownership, and value of the information assets, i.e., intellectual property, intangibles, trade secrets, competitive advantages, etc., are sustained for the duration of their value to a specific transaction…

Its essential today that there must be (a.) a continued dialogue among a company’s various professional disciplines, (b.) recognition and respect for each disciplines’ perception of the risks to company intellectual assets, and (c.) resources available to execute, and (d. the disciplined attitudes to reach consensus on what actions are necessary.


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