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Intellectual Property Fraud
Intellectual property includes intangible assets such as patents, design rights, customers lists etc. Even business assets like stocks, plants and machinery are labeled as intellectual property. Intellectual property can be vulnerable to theft by third parties or even staff. Employees may leak important customer lists or patent information or any design rights to third parties either knowingly or unknowingly. From electronics to pharmaceuticals, every industry is affected directly or indirectly by the intellectual property fraud. The best example can be given of electronic products that are illegally copied in countries like China and arrive on shelves before the original. The world health organization estimates that 10 percent prescription drugs like Viagra are counterfeit and according to Italy's Chamber of Commerce, at least 20 per cent of apparel purchased is counterfeit. Because of this trend, both consumers as well as companies are harmed.
Several critical steps can be taken by companies to protect themselves from intellectual property fraud:
1. Conduct an Intellectual Property Audit: Conducting an IP(intellectual property) audit includes:
A. Reviewing the HR policies by making new employees sign non-disclosure agreements, and having IP ownership and non-compete provisions.
B. Examining the physical security is very important. A through examination of close-circuit cameras, and locks should be conducted to check whether they are functioning well since they are used to keep an eye on those critical IP documents.
C. The legal rights of the files should be analyzed. Also, IT access rights as well as some policies that allow information to be copied should be evaluated first.
2. Have a detailed knowledge of your partners: Conduct a background check on employees, executives, and employees of your local partner before entrusting any valuable IP.
3. Bring an IP theft expert: An IP theft expert on site visits to suppliers and manufacturers has the capability to notice things that will enhance your IP protection. Implementation of royalty tracking devices throughout the supply chain is equally important.