Published on Wednesday, Mar 28, 2007
APPLIED thought and creativity are the true assets in today's information age marketplace. Ideas and knowledge have proved to be the forerunners of company profitability apart from physical assets.
However, information regarding inventions, trade secrets, business plans, designs, sales strategies, pricing information, client lists and contacts' information has to be invested in the workforce to be worthwhile. Such information is called Intellectual Property (IP) The term implies that the subject matter is the product of the mind or the intellect. IP rights are legally protected just as any other form of property. This ensures that employees do not intentionally or unintentionally reveal confidential information to competitors or carry it to a new job. Invaluable information could be lost in the blink of an eye or a click of a mouse.
As a result of such incidents, the company incurs heavy financial losses, in fact, according to a risk management company, IP theft costs U.S. companies about $300 billion annually. Loss of the exclusive knowledge edge can spell inevitable doom as James Chandler, President of the National Intellectual Property Law Institute, corroborates, `If a company loses its intellectual assets, it could die'.
Hanging on to intellectual assets
Intellectual assets are always at risk because rivals would love to lay their hands on a company's manufacturing processes, systems or contract details. Employees with access can easily pass them on for a price. The company may not even know what is going on till a competitor beats it to the market with an innovation which they recall was their original idea. The onus is on the companies to comprehensively safeguard their proprietary material from abuse and misuse.
Cover your back - No company can ask its employees to leave the trade secrets and know-how (acquired on the job) behind like other equipment. Nor, can it wipe their memories clean. Nevertheless, it can frame an Intellectual Property Rights policy in the form of restrictive covenants. Non-disclosure and non-compete agreements with employees will restrict breach of confidential data and enable restrictions on working for the competition for a specified period. The conditions though have to be reasonable for the contract to be enforceable. Yet only a few countries have stringent laws safeguarding intellectual property.
Prevention is better than cure - Hiring managers should carefully screen candidates to ensure that the new employees are not infiltrators or have the potential to carelessly reveal information. Disgruntled employees could maliciously retaliate by purloining trade secrets. Employers should endeavour to keep employees satisfied and challenged and employ a Chief Security Officer (CSO) to accurately identify, mark and safeguard critical details.
On their guard - Training and educating employees about the importance of confidentiality will help them visualise their role in the onerous task. Managers should periodically interact with employees so they understand the criticality of their work and make them responsible. Else, strategic details may seem inconsequential to them.
Black holes - Rival companies use spies, scamsters, bugs, bribes, thievery and even hire competitive intelligence firms to sneakily glean critical information from competitors. They may disguise as an interested client or a research student, place pretext calls or even eavesdrop on conversations causing employees to naively reveal ostensibly innocuous details. Therefore, employees should protect their laptops, curb sensitive business talk in public places and restrict research descriptions. HR executives should check salespersons' talks and staff blog postings to prevent pilfering or even accidental leakage.
For your eyes only - A competitive intelligence expert says, "More damage is done by a company's lax security than by thieves". Securely isolating data with physical locks or digital passwords and firewalls can reduce the risk significantly. Installing software tools can also help keep track of documents thereby preventing potential misappropriation. Also, companies should not allow unrestricted access to the classified records but restrict access to select executives. A `confidential' legal warning on sensitive information is thus an imperative.
Plug the leak - It is indeed difficult to identify, track and restore loss of trade secrets. Nevertheless, once a revelation is detected, the company should act fast to control the damage and invoke disciplinary measures and initiate legal action immediately.
All said and done, managers should safeguard confidential information with their life. After all, companies can afford to lose buildings or employees but not intellectual property.
However, information regarding inventions, trade secrets, business plans, designs, sales strategies, pricing information, client lists and contacts' information has to be invested in the workforce to be worthwhile. Such information is called Intellectual Property (IP) The term implies that the subject matter is the product of the mind or the intellect. IP rights are legally protected just as any other form of property. This ensures that employees do not intentionally or unintentionally reveal confidential information to competitors or carry it to a new job. Invaluable information could be lost in the blink of an eye or a click of a mouse.
As a result of such incidents, the company incurs heavy financial losses, in fact, according to a risk management company, IP theft costs U.S. companies about $300 billion annually. Loss of the exclusive knowledge edge can spell inevitable doom as James Chandler, President of the National Intellectual Property Law Institute, corroborates, `If a company loses its intellectual assets, it could die'.
Hanging on to intellectual assets
Intellectual assets are always at risk because rivals would love to lay their hands on a company's manufacturing processes, systems or contract details. Employees with access can easily pass them on for a price. The company may not even know what is going on till a competitor beats it to the market with an innovation which they recall was their original idea. The onus is on the companies to comprehensively safeguard their proprietary material from abuse and misuse.
Cover your back - No company can ask its employees to leave the trade secrets and know-how (acquired on the job) behind like other equipment. Nor, can it wipe their memories clean. Nevertheless, it can frame an Intellectual Property Rights policy in the form of restrictive covenants. Non-disclosure and non-compete agreements with employees will restrict breach of confidential data and enable restrictions on working for the competition for a specified period. The conditions though have to be reasonable for the contract to be enforceable. Yet only a few countries have stringent laws safeguarding intellectual property.
Prevention is better than cure - Hiring managers should carefully screen candidates to ensure that the new employees are not infiltrators or have the potential to carelessly reveal information. Disgruntled employees could maliciously retaliate by purloining trade secrets. Employers should endeavour to keep employees satisfied and challenged and employ a Chief Security Officer (CSO) to accurately identify, mark and safeguard critical details.
On their guard - Training and educating employees about the importance of confidentiality will help them visualise their role in the onerous task. Managers should periodically interact with employees so they understand the criticality of their work and make them responsible. Else, strategic details may seem inconsequential to them.
Black holes - Rival companies use spies, scamsters, bugs, bribes, thievery and even hire competitive intelligence firms to sneakily glean critical information from competitors. They may disguise as an interested client or a research student, place pretext calls or even eavesdrop on conversations causing employees to naively reveal ostensibly innocuous details. Therefore, employees should protect their laptops, curb sensitive business talk in public places and restrict research descriptions. HR executives should check salespersons' talks and staff blog postings to prevent pilfering or even accidental leakage.
For your eyes only - A competitive intelligence expert says, "More damage is done by a company's lax security than by thieves". Securely isolating data with physical locks or digital passwords and firewalls can reduce the risk significantly. Installing software tools can also help keep track of documents thereby preventing potential misappropriation. Also, companies should not allow unrestricted access to the classified records but restrict access to select executives. A `confidential' legal warning on sensitive information is thus an imperative.
Plug the leak - It is indeed difficult to identify, track and restore loss of trade secrets. Nevertheless, once a revelation is detected, the company should act fast to control the damage and invoke disciplinary measures and initiate legal action immediately.
All said and done, managers should safeguard confidential information with their life. After all, companies can afford to lose buildings or employees but not intellectual property.
PAYAL CHANANIA
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