Intellectual Property Theft Costing $250 Billion

Article excerpt

Though companies allocate only 3 percent of their security resources to guarding against intellectual property theft, it's costing them almost $250 billion per year, according to a recent study.

"After people, it's the most important resource a company can have," says Dan Swartwood, an intellectual property security expert who has just released the results of a two-year project.

The most common way companies lose intellectual property -- such things as patents, trademarks, research and development and manufacturing processes -- occurs when workers are hired by other companies. "It's the only asset you can lose and still have and it only has value when it's distributed," Swartwood says. A manager of information security for Compaq in Houston, Swartwood has co-authored Trends in Intellectual Property Loss with Richard J. Heffernan, a management consultant specializing in counter- espionage. The report is their third survey published every two years. It concludes that more than 1,100 "potential loss incidents" within firms occur each year. Some 172 Fortune 1000 companies participated in the survey for a 13 percent response rate. Swartwood says companies must take a pro-active stance on the loss of intellectual property and educate employees about keeping secrets in-house. "The best use of money is spent in communicating to workers that information is important and by giving them rules of the road," Swartwood says. For example, management should tell workers to refrain from talking about proprietary information in public and to friends. Sending delicate information via e-mail and other electronic modes also is risky, Swartwood says. Information about manufacturing process is most often purloined, Swartwood says. The current survey identifies $44 billion worth of intellectual property targeted in a 17-month period for the companies surveyed, with company insiders as the biggest threat. …