We recently read Ten Famous Intellectual Property Disputes on Smithsonian.com. Some of the cases are funny – the tattoo that Ed Helms’s character accidentally gets in The Hangover Part II is identical to Mike Tyson’s, so Tyson’s tattoo artist sued Warner Bros. over copyright violations. We bookmarked the article, however, to send to some of our actuary friends who may not know that Sir Isaac Newton and Gottfried Wilhelm Leibniz had duked it out in the 18th century over who really invented calculus.
While the article gave us a smile, some of the suits it mentions – Mattel’s Barbie vs. the Bratz for instance – serve as good examples of just how careful companies need to be about intellectual property, whether they’re protecting their own property or in danger of violating someone else’s.
The growing threat
The threat of intellectual property theft and hijacking presents companies with a wide set of issues. A recent study, prepared by the National Intellectual Property Rights Coordination Center outlines how the U.S. government approaches and seeks to protect threats to intellectual property. Caution: Reading the report might make you feel more susceptible to sabotage. The report finds that intellectual property threats are growing in size and scope, counterfeiters of all types are getting more sophisticated in how they steal intellectual property, and counterfeiters and their goods are moving from secondary markets into primary markets. From individuals who steal designs, to manufacturers who create, ship, and sell fake purses, to manufacturing fake goods and building stores to sell them in – who could forget when Chinese authorities found 22 fake Apple stores in a single city in China in 2011 (read the BBC News article if you missed this one.) Individuals, gangs, organized crime syndicates, and even terrorists organizations fund these operations. The problem is vast.
Add to this list the issue with patent trolls — nefarious characters who purchase patents and then launch frivolous lawsuits to enforce them — and depending on what kind of company you own, even if you hire a platoon of Harvard lawyers you could still get hit by intellectual property violations or thefts.
Fixing the problem
The National Intellectual Property Rights Coordination Center reports that the threat isn’t just to individual businesses. The problem impacts public health and safety, infrastructure and national security. The report recommends a “multi-dimensional response” on the part of the government. Perhaps your company should consider a similar tack.
Be vigilant about your security policies. Work with HR, your legal advisors, and outside consultants to develop strategies to keep your employees from undermining your intellectual property. Continually check your IT structure for safety and security. Find ways to keep an eye on your marketplace to identify and deal with potential violations or copies of your product, and/or train your staff on how to keep an eye out for fake goods making their way into your operations – particularly if you could be liable for a faulty part from a supplier.
The Pandora’s Box of intellectual property issues that could have an impact on your business should also be insured. Talk with your broker to make sure that your coverage is up to date and work with your advisers to make sure your polices could withstand the wide range of potential threats that you face.
If you find that you may want additional insurance and security through a captive insurance company, please contact us.