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Intellectual Property Theft, Prevention & Protection – Is It an Issue?

Intellectual Property (IP) is more than just patents, trademarks and service marks.  It can encompass any copyrightable attribute aspect of your company as well as proprietary information that is developed.

In recent years, the rate of IP theft and prosecution (either civil or criminal) has increased; and it’s not solely based on industrial espionage in the traditional definition.  More and more employees are leaving and taking the recipe to the success of the business with them.

How are you, the CFO addressing these issues?

Answers

Topic Expert
Keith Perry
Title: Consulting CFO and Business Operations A..
Company: Growth Accelerator
(Consulting CFO and Business Operations Advisor, Growth Accelerator) |

Wayne,

In my industry we look at copyrights / patents etc to excess; investors like these things. However, from an *operational* standpoint, IP can be a significant part of what makes your concern a going concern, and encompasses much more than just what is filed with the Feds.
*Defend against destruction: Having a formal policy and process for terminating employees is critical. Outgoing employees can both deliberately or inadvertently destroy immense amounts of value. The policy should both prevent destruction (password changes, etc) and actively promote retention (document / knowledge handoff processes).
*Defend against theft. The policy and the signed agreement are starts; it makes everyone aware of the rules and the enforceability. Access control is a good next step: keeping data on a server or in the cloud, and not on hard drives. Marking confidential documents as "confidential" (and there is some cool software out there that makes it so that copied PDFs say "Unauthorized Copy"; or that allow you to see but not share or save a document....CloudPic does this brilliantly). A lot of IT folks are way behind on these implementations, and it is up to the CFO to press for implementation.
*Defend against loss: This is a "two birds with one stone" opportunity. Back up all devices offsite, and if you're doing your doc warehouse in the cloud, you're already there.
*Audit for compliance: Seriously...check people's PCs, emails etc. Formal letters saying "you violated this policy" go a long way toward getting people aware that the policy is a serious one.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

Thank you Keith,

But IP isn't all about IT (although it is a major aspect of any business, and as such, an important part of IP, BCP, etc.). (can we add any more acronyms?)

Anyone else looking into this very important topic?

Bob Scarborough
Title: CEO
Company: Tensoft, Inc.
(CEO, Tensoft, Inc.) |

My two bits - the options available are personnel processes, enforcement processes, IT practices, and general business processes.

We have every employee in our company - from the CEO down - sign an IP ownership document as a condition of employment. We have an exit interview process that closes employee access and reminds them of the IP ownership. You can't prevent bad intent from employees (although some try through IT practices) - but you can document your legal standing so when appropriate you can defend yourself.

Enforcement is tricky and problematic - so it is usually a last resort step (or competitive step) and not helpful for most of the scenarios in IP leakage that occur.

IT practices are a creative area where there are options. Certainly controlling access to information stores (source code, data, etc) is important and should be standard. My personal opinion on the control efforts to eliminate employee remote access or ability to move information have the illusion of helping but really cannot thwart a determined thief. Mostly the tighter IT requirements annoy the rest of your team.

On the business process side - where how you do things is the IP - you can take steps. Documenting the processes and moving the processes into the company culture and systems will ingrain these into who you are as a company and make them harder to transfer even if someone knows how they work. When people are your process (what they know in their head) it is much easier for this knowledge to float away and transfer to another organization.

The CFO role can certainly influence personnel processes and business processes. A business process focus is one area where CFOs can definitely add value to an organization beyond counting and forecasting the beans.

Any technology needs to consider IP protection and ownership (from a customer as well as an internal perspective) - it is your biggest asset along with your employees.

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