Magazine article Security Management

IP Study. (ASIS News)

Magazine article Security Management

IP Study. (ASIS News)

Article excerpt

U.S. companies lost up to $59 billion in proprietary information and intellectual property according to survey results released by ASIS International, through its Council on Safeguarding Proprietary Information. ASIS was aided by the sponsorship of Pricewater-houseCoopers, the U.S. Chamber of Commerce, and the ASIS Foundation, Inc.

The 10th Trends in Proprietary Information Loss survey was sent to CEOs of Fortune 1,000 companies and of 600 small and mid-size companies that belong to the Chamber of Commerce. The report found that responding firms experienced proprietary information and intellectual property (IP) losses of between $53 billion and $59 billion from July 1, 2000, to June 30, 2001.

Of the companies responding to this study, 40 percent reported incidents of known or suspected losses of proprietary information. Companies with such losses experienced two incidents in the reporting period. Research and development (R&D) and financial departments suffered the greatest dollar value of loss per incident--$404,000 and $356,000, respectively.

The survey also showed that many companies do not place a value on intellectual property until litigation. Because these assets are not typically tracked in corporate accounting systems, they often are not well protected.

The greatest risks pinpointed for companies reporting a loss of proprietary information and intellectual property were former employees, foreign competitors, on-site contractors, and domestic competitors. Hackers were also considered a major problem. Companies that had made IP protection a high priority indicated no loss incidents. "While the risk of cyberterrorism is increasing, the theft of intellectual property is where companies are incurring the most losses to date," says Jay Ehrenreich, senior manager at Pricewater-houseCoopers' cybercrime prevention and response group.

In addition, although most companies agree that the Internet represents a new threat, most do not require that information sent over the Internet be encrypted. Surprisingly, information security was given a lower priority at companies where loss had occurred. Stephen Jordan, Executive Director for the U.S. Chamber of Commerce Center for Corporate Citizenship, warns against this attitude. "Electronic thieves are hurting businesses. We applaud the steps many companies are taking to protect themselves, but it's clear this is a big problem, and businesses that haven't invested in cybersecurity are paying the price. …

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