Intellectual Property Theft

What is Intellectual Property Theft?

Intellectual Property Theft, or IP Theft, is the unlawful seizure of any intangible asset that possesses value to a company, person, or entity. This can include:

• Trademarks
• Copyrights
• Trade secrets
• Business negotiations
• Product plans
• Marketing strategies
• Proprietary information
• Music or other creative works
• Patents

The 5 Types of Intellectual Property

Intellectual Property is classified into five main categories:

1. Copyright Infringement – The unauthorized use of a creative work protected by copyright law; this can range from illegally downloading music, to pirating software.
2. Trademark Infringement – Trademarks distinguish the products or services of one entity from another. Using these protected elements without a license constitutes trademark infringement.
3. Patent Infringement – A patent is granted to a person or organization for an original invention, design, blueprint, or business process. The use of the patented item without explicit consent constitutes patent infringement.
4. Trade Secret Theft – The unauthorized possession of confidential information that drives a business’s competitive advantage.
5. Design Infringement – The illicit use or replication of protected design elements representing a company’s brand, including logos, packaging designs, object shapes, and other unique characteristics.

Top Causes of Intellectual Property Theft

There are many contributors to intellectual property theft today, as digitization has widened the threat landscape and opened the avenues for attack.

Intellectual property can inadvertently be exposed via:

• Collaboration tools like Asana and Slack – While these tools can facilitate quick and easy corporate communication, they are also not protected by the same cybersecurity measures as the rest of the enterprise. Because platforms like these oversee their own security and are high-profile targets, they stand the chance of being attacked.
• An unintended email – Emails containing intellectual property such as business proposals, negotiations, and patented material may be necessary for the efficient flow of business but may also be detrimental if delivered incorrectly. Industry research reveals that 58% of employees report having sent an email to the wrong person. Without proper email security solutions, intellectual property could end up in the wrong hands.
• Insider threats – Disgruntled or careless employees could also be the means of losing sensitive proprietary data. While carelessness leads to inadvertent threats like sloppily saved documents and email misfires, malicious insiders can wreak havoc through their special internal access by either pretending to make careless mistakes, or by remaining unnoticed while they infiltrate intellectual property using USB devices messaging apps, and file-sharing services.

Penalties for Intellectual Property Theft

While penalties depend on the individual case, the legal consequences for stealing IP can include the following:

• Trade secret theft – Fines of up to 5 million dollars or three times the value of the trade secret, whichever is greater.
• Trademark theft – Up to 10 years federal imprisonment and 5 million dollars.
• Copyright theft – Statutory fines and up to 10 years federal imprisonment.
• Economic espionage – Up to 10 million dollars or three times the value of the secret.
• Computer and internet fraud – Up to 30 years federal imprisonment.

Protecting Your Intellectual Property

Here are some ways to prevent intellectual property theft in your organization:

1. Have employees, vendors, and all stakeholders sign a non-disclosure agreement prior to being granted access to sensitive IP.
2. Create a policy of immediately revoking departing employees’ access to proprietary company information.
3. Operate on the principle of least privilege and make all intellectual property available on a need-to-know basis.
4. Conduct exit interviews to make sure no departing employees have taken or retained access to intellectual property, and keep a written attestation.
5. Implement network segmentation, and compartmentalize electronically stored information to protect its online access.

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