Managing Your Intellectual Property (IP)
When businesses consider Intellectual Property management, they often think about protecting their own assets, in the form of copyrighted material, trademarks, patents and trade secrets. But businesses also need to ensure that they are managing the IP rights of others, according to Kirstin Simonson, a Segment Lead in Global Technology at Travelers. “This is especially true in the technology sector, which faces some of the most complex IP issues,” says Simonson.
One common violation of intellectual property is software copyright infringement. A common scenario may include a company that purchases software licensing rights for 400 employees, and then fails to update the licensing for an additional 100 employees later added to staff. According to a BSA Global Software Survey, they found that 43% of the software installed on personal computers in 2013 was not licensed.¹
Why Businesses Need an IP Risk Management Program
The survey also reported that only 35% of companies have written policies requiring the use of properly licensed software. It also found that there is an awareness gap about software policies between workers and IT managers. Appropriately ensuring the rights of others is an important part of risk management for your organization because IP, in all of its forms, is a critical business asset.
Companies need an IP Risk Management plan because:
- They may face legal action for copyright infringement and other IP violations.
- They may have to perform an intensive software audit to prove they have resolved the problem.
- Use of unlicensed software may put the business at risk for data breaches, data loss or other forms of information security and network security threats.
- Laws protecting IP can vary greatly around the world, so it is important to understand which ones apply to your business.
What to Include in an IP Risk Management Program
“Like all risk management, a good IP Risk Management Program needs to be proactive and comprehensive from an enterprise perspective,” says Simonson. “Consider IP rights management as a tool for growth, and not something to consider once the product is out to market.”
An IP rights management program should include:
- The ability to track licensing relationships and royalty obligations.
- Companies should consider some form of automated tracking to ensure they are not only managing their own IP rights that are licensed to others, but they are living up to the licensing agreements they have in place with third parties.
- Formal clearance procedure and registration strategy.
- Engaging legal counsel to perform an IP search may be appropriate in many instances or at the very least, determining whether there are automated tools that can assist in the process.
- Having a well-defined strategy for determining whether title is clear to the IP, whether it should be registered and how to maintain the registration.
- Contracting and licensing agreements should include appropriate provisions.
- Whether it is a work-for-hire arrangement where the IP rights would be assigned to the business or a licensing agreement to use the IP, it is critically important these be spelled out and managed.
- Response plan or dispute resolution plan in the event someone challenges your IP rights.
- Just like any peril or loss a business may face, whether it is hurricane, liability allegations arising out of the failure of the product, or a cyber event – a strong response plan when an event happens will save hours and dollars.
- Education of all employees of what constitutes IP and how their misuse or mishandling can put the company at risk.
- Train everyone in the company so they understand how they might put the business at risk.