News

Pilot Program Exposes Gaps in IP Protections, and Perceptions

April 21, 2014
Categories: Intellectual Property

How well are companies doing to safeguard their intellectual property? Pretty well in some respects, with blind spots in others and — overall — not as well as they tend to believe.

These are some of the findings from CREATe’s recently completed pilot program, with participation of 37 large and medium sized companies across industry sectors and geographical regions.

The new “CREATe Leading Practices for IP Protection: Pilot program results report” documents how these companies were able to use CREATe’s approach to gain a comprehensive picture of their current safeguards for protecting valuable intellectual assets and competitive information, and then use these results to build a more robust protection system.

The process begins with a self-assessment by each company in eight areas: Policies, Procedures & Records; IP Compliance Team; Quality of Risk Assessment; Supply Chain Management; Security & Confidentiality; Training & Capacity Building; Monitoring & Measurement; Corrective Action & Improvement

The second step is an evaluation on the same categories, this time by CREATe experts. In the IP pilot results, as is typical when a third party assessment is involved, the companies virtually always evaluated their performance more favorably in every category than CREATe.

Room for improvement

Nonetheless, the companies’ assessments mirror the relative strengths and weaknesses. Here are some highlights from those findings:

  • For most companies, ‘Security and Confidentiality’ is the most mature part of their IP protection. Historically, businesses have put physical security measures in place and this proactive behavior has transitioned to strong IT security as more assets have become electronic.

The independent evaluation interviews revealed, however, that many companies were not tuned into the broader picture of IP protection.

One area that needs attention for about half of the companies that participated is protection of trade secrets. CREATe evaluators rated the protection of trade secrets as “low maturity” for 45% of the businesses, finding that this function was primarily handled by security guards and/or IT staff and not integrated into business operations.

  • ‘Monitoring and Measurement’ is the least mature aspect of IP protection. Many companies focus on contractual terms as the primary means of protecting their IP but do not conduct monitoring to ensure that their business partners are complying with those terms. A more proactive approach in this area can help avert costly legal actions, and the damage that comes from stolen IP.
  • ‘Policies, Procedures and Records’ for IP protection needs attention. Most companies have some policies in place, but they are incomplete and tend to focus primarily on IT and physical security. Moreover, in the assessment by CREATe expert evaluators, 80% of participating companies either have few or no written procedures related to their IP protection policies.
  • Companies lack rigor around IP protections in their supply chain. While many companies offer IP training internally, 75% of companies provide no IP training to supply chain partners, even those handling important IP. If an IP protection problem crops up, CREATe evaluators found that 55% of companies either do nothing or rely on their supply chain companies to correct it. Thirty-five percent said they provided help if asked.

Based on an individual summary report from the pilot program, each participating company was able to see where they had blind spots in their IP protection, and get a roadmap, essentially, for improvement.

The companies also received the CREATe Leading Practices ‘Guide to Improving Your Intellectual Property (IP) Program,’ a 200+ page document with specific steps for maturing systems, along with sample resources, such as Model IP Policies and executive communications, checklists and other tools.

New visibility, new actions

A multi-billion dollar U.S. electronics firm that sources from a complex global network enlisted 10 of its suppliers to participate in the program, as part of an effort to reduce the risk of IP infringement both upstream and downstream.

“It has been really useful to gain visibility into the IP protection programs of key companies in our supply chain,” a company representative said. “We think that CREATe’s focus on helping companies understand where they are and how to improve is the right way to go.”

For some companies, the assessment initially challenged their perceptions.

“At first, we were surprised at the score gaps [between the self-assessment and independent evaluation] in certain categories,” a Chinese company said in its feedback on the program. But the findings prompted the firm to focus on three areas that got low marks — policies and procedures, creating a cross-functional IP compliance team and training and capacity building in the area of IP protection. “We now have a clearer idea of what to do next and how to get started,” the company said.

To learn more about CREATe Leading Practices for IP Protection and CREATe Leading Practices for Anti-Corruption, please email: info@CREATe.org.