Trade Secret Theft: US$600 Billion and RisingTrade Secret & Confidential Information Theft: Why this issue is growing and how to prevent it
When we talk about intangible assets often the first response is “do you mean patents and trademarks?” The answer is “yes and no”.
While patents and trademarks are undoubtedly important, for most companies the bulk of their intangible assets are not in the “hard” or “registered rights” such as (patents and trademarks), but in “soft rights” such as confidential information including trade secrets, industrial know-how and (increasingly) unpublished software code and data.
Globally, disputes around confidential information trade secret theft are increasing. They are at the heart of President Trump’s trade war with China. Trump alleges (and is not completely wrong in this respect) that China’s economic miracle is built in part off intellectual property (intangible assets) stolen from US companies. The vast bulk of these stolen assets are not patented but in the form of confidential information. They are extremely valuable – in fact, it is estimated by the US IP Commission that intellectual property theft costs the US economy between US$225 and US$600 billion annually – with China being pointed to as the main perpetrator.
Unfortunately far too many companies pay far too little attention to these unsung, but critical information assets. They are often the most valuable assets a company today owns, but they are off balance sheet, are not on the fixed asset register (by definition) and their impact is not typically captured in the P&L. They are out-of-mind and out-of-sight and that makes them vulnerable.
This month we are dedicating our newsletter to confidential information and trade secrets: the most valuable yet often most unloved of all intangible assets.
In this newsletter, we're also proud to announce that we are sponsoring the upcoming Trans Tasman Innovation Awards. The Awards are part of the Australia New Zealand Leadership Forum in September, where EverEdge CEO Paul Adams will also be speaking as part of a panel discussion alongside Stephen Gilmore, Chief Investment Officer, NZ Super Fund; Phil Chronican, Group CEO National Australia Bank; and Ms Hinerangi Raumati-Tu’ua MNZM, Chairman, Te Ohu Kaimoana. Further information on the Awards and Forum can be found below.
If you are interested in understanding more about how we can help you leverage, manage risk or value your intangible assets, please get in touch with our team at any time or click on the links below to register to attend one of the events our team will be speaking at over the coming months.
Today, the theft of trade secrets and confidential information is the number one intangible asset risk companies face. Yet many Boards and management teams have not yet woken up to the significance this threat poses to their own organization or how prevalent this issue is. Find out more about why these assets are important, as well as how to identify and mitigate risk around them.
It is estimated that intellectual property or intangible asset theft costs the US economy between US$225 and US$600 billion annually.
With so much at stake, it is surprising that many companies are failing to put the right systems and processes in place to protect their trade secrets and confidential information. But the good news is, it is possible to take steps to minimize the theft or leakage of these assets.
The first and most important intangible asset risk is the leakage of critical confidential information. Most companies, unfortunately, leak like a sieve and are constantly losing valuable intangible assets out through customers, suppliers, and employees - but how can you prevent this?
THE ONLY THING THAT COUNTS: CLIENT IMPACT
“At first glance, our business might look to be primarily based on tangible assets, but EverEdge helped us dig beneath the surface and recognize that a lot of our value is actually derived from the confidential information, digital content and other intangible assets we hold.
“While we initially engaged EverEdge on a valuation project, we extended our relationship due to the knowledge and insights the team brought to our table. EverEdge has assisted us with building a framework to identify and value our intangible assets, as well as helping us to mitigate risk around these assets. I would highly recommend EverEdge to anyone who wants to ensure they are fully capitalizing on the value of their intangible assets.”
This month, we also want to draw your attention to the Trans Tasman Innovation & Growth Awards, which are being run as part of the upcoming Australia New Zealand Leadership Forum. We are proud to be a sponsor of these Awards, which celebrate innovation, growth and the impact of emerging businesses in Australia and New Zealand. More than 100 entries have been received and the judges are currently assessing submissions, with the finalists due to be announced mid-August. We encourage you to watch out for the upcoming finalist and winner announcements and to join us in congratulating the winning businesses. More information on the Awards can be found here.
Do you know where your intangible risks lay? EverEdge’s managing director, Australia and New Zealand, Michael Masterson, gives you the hard facts in this easy 5 min read that was published this month in StrategicRISK. Click here to read the article.
We’re sending this to you because we’ve worked with you or had a connection over the years. Each month we’ll share with you the latest thinking from the world of intangible assets. If you believe you have received this email in error, you may unsubscribe using the link at the bottom of the newsletter.