Transfer Pricing Associates

An Effective IP Protection Program

post Monday January 6, 2014

Ip stealing

The protection of the intellectual property of a company is very important nowadays, as their IP generates a lot of their value. But not all companies have a good protection program and beside that they are not familiar with the risks associated with intellectual property. Many companies can still improve a lot in the field of intellectual property.

Though intellectual property theft a company can lose a lot of money. For example, Ford Motor CO, suffered more than $50 million in losses after an engineer copied 4,000 company documents onto an external hard drive in 2006 and went to a competitor. This can be avoided by protecting the intellectual property of the company so that the value of the company is guaranteed. It is very important because as much as 75% of most organizations value consists of intangible assets (intellectual property, proprietary competitive advantages, etc).

Nowadays, intellectual property theft happens much more than a couple of years ago because we are dealing with two factors:

  1. Technology
    A lot of companies are changing from paper documents to digital documents, this has the effect that documents can be stolen very easily because you can copy it and put it on a usb-stick.
  1. Suppliers and business partners
    Companies are working with international suppliers and business partners. This had the effect that there arise vulnerabilities because of the distance, lack of transparency and markets where the rule of law is comparatively weak. In these markets the systems are less mature and this increase the risk for theft.

So what should companies do to protect the intellectual property? The Center for Responsible Enterprise and Trade (, came up with eight points that are necessary for an effective program for IP protection. These points apply to the companies but also for the suppliers and the business partners.





Policies, Procedures and Records

Guidelines are necessary within an organization for all types of IP


IP Compliance Team

A special team, consisting of people from different departments and senior management, that is responsible for IP protection


Scope of the Program and Quality Risk Assessment

Systems must be in place to assess the risks of IP theft by company employees and among third parties


Management of Supply Chain and Contractors

Systems for effective due diligence, contracts, communicating IP protection policies and ongoing management of IP are essential.


Security and Confidentiality Management

Computers and corporate networks should be designed to protect IP and confidential and proprietary information kept by employees, contractors and third parties.


Training and Capacity Building

Offer employees and third parties a training about IP Protection and compliance


Monitoring and Measurement

Systems should be designed to monitor the implementation of the IP protection


Corrective Actions and Improvements

Develop a framework for implementing corrective actions and improvement processes when a problem with the IP compliance program occurs.

Source article: Riskmanagement Magazine  and  Intellectual Property Office

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