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Intellectual Property Security: Don't Lose Your Head

Intellectual property isn't always easy to identify. It's even harder to protect. Here's how CSOs can work with others to protect their companies' future.

By Simone Kaplan

April 01, 2003 — CSO — Pity the CSO. His worth is often measured by what doesn't happen on his watch. And he's often asked to protect things you can't see.

If you think it's tough to secure a building or a network, try protecting an idea. Ideas are invisible; they have a habit of working their way into conversations—and not always with the people who should be hearing them. They can get lost or stolen without anyone knowing they're even gone until your competitor beats you to market with an innovation you thought was yours alone.

Yet ideas are much more valuable than many of the tangible assets a CSO is sworn to protect. Intellectual property can be anything from a particular manufacturing process, plans for a product launch, a chemical formula or the names of the countries in which your patents are registered. In short, this kind of intangible proprietary information can amount to nothing less than your company's competitive future.

More and more, protecting such assets falls within the job description of the CSO. However, sometimes intellectual property ranks lower on a CSO's priority list than other security concerns, not because it is any less important but because it's just so hard to wrap your brain around. Intellectual property also varies from company to company and industry to industry. A CSO in the entertainment industry, for example, is not necessarily going to look at IP loss and theft in the same way as a CSO at a chemical company—so CSOs will approach protection of their companies' assets differently.

The upside is that IP loss, and how it happens, is predictable. Which means you can act preemptively. But IP protection requires patience and tenacity. Like everything else in life, it's not easy.

Understand What to Protect

Think of intellectual property as the lifeblood of an organization. "If a company loses its assets, it could die," says James Chandler, president of the National Intellectual Property Law Institute. Intellectual property comprises the principal assets by which a company is able to create its products or services. If those assets are lost or stolen, the company could lose its foothold in the marketplace. In fact, intellectual property theft costs U.S. companies about $300 billion per year, according to Richard Isaacs, senior vice president at The Lubrinco Group, a risk management company.

The best way CSOs can protect proprietary information is by educating themselves and their employees about what their organizations hold valuable. If all employees understand what needs to be protected, they can better understand howand from whomto protect it. To do that, CSOs must communicate on an ongoing basis with the executives who oversee intellectual capital. Meet with the CEO, COO and representatives from HR, marketing, sales, legal services, production and R&D at least once a quarter, if not more often, says John Pontrelli, director of security at W.L. Gore & Associates. "You must work in concert as a group to adequately protect IP," he says, emphasizing that such communication is an ongoing process, not a onetime event.