When It Comes to Intellectual Property Theft, Are Your Own Worst Enemy?

Manufacturers spend big bucks when it comes to protecting their intellectual property. From tens of millions lobbying the government for patent reform, to billions on patent litigation, intellectual property theft stands as one of the top risks for global manufacturers. While outside parties are always a factor when it comes to IP theft, corporations need to take it upon themselves to take a critical look at their own asset management systems to identify areas of potential intellectual property leaks. Only by identifying these leak-prone areas can you mitigate the risk of IP theft and the correlating business loss.

The Global Scope of Intellectual Property

Intellectual Property industries are a key driver of growth in the US and Global economy. The “Intellectual Property and the U.S. Economy, 2016 update” published by the U.S. Department of Commerce states that:

  • Trademark intensive industries are largest in number and contribute the most employment with 23.7 million in jobs in 2014 (up from 22.6 million in 2010).
  • IP intensive industries account for $6.6 trillion in value added in 2014, up 30% from $5.06 trillion in 2010.

IP theft stretches across a multitude of industries, from consumer goods and manufacturing, to movies, music and software. Anything that can be trademarked is susceptible to IP theft.

What Is the Cost of IP Theft?

Rampant IP theft has resulted in substantial economic losses, not just in the U.S., but in the world.

  • According to U.S. Department of Homeland Security, Intellectual Property Rights Seizures statistics, in 2014, total number of IPR related seizures was 55.7 Million and the total value of IPR related seizures (MRSP) was $250 Billion.
  • Up to 5% of goods imported into the European Union are fakes, according to the 2013 OECD report, “Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact”.
  • In the defense industry alone, the number of known counterfeit electronic products more than doubled from 2005 to 2008, according to a U.S. Commerce Department report released in January 2010.

How Does IP Theft Occur?

When people first think of intellectual property theft, they may envision a Hollywood movie plot. The rogue hacker hiding out in some warehouse, or a team of trained bank thieves planning their last heist before they get out for good. The reality of the situation is that there’s no one specific cause of IP theft.


However, a surprising portion of IP theft stems from the mismanagement of product/asset samples and prototypes during the asset lifecycle. That is, from IP sensitive goods not yet released to the general market. Having a strong asset tracking system in place is a first step in mitigating the risk of IP theft.


Currently, most manufacturers depend on two major processes to track these assets:

  1. Manual, ad hoc paper process that depend on employees or contractors to log the movement of these samples
  2. Online information systems that are supported by an internal IT team

Regardless of their chosen system, manufacturers need to ensure that their asset tracking system:

  • Follows the asset from its creation to disposal
  • Shows the ownership of the asset during each development stage
  • Enforces asset accountability and traceability
  • Scalable to meet the SKU demands of the manufacturer
  • Easy to use, to ensure adoption by all vested parties

U.S. manufacturers continue to spend billions to protect their intellectual property. But have they focused on “the biggest bang for the buck”?  While large investments in IT systems and legal contracts certainly help, the higher returns are reachable only by improving the accountability in the flow of IP sensitive materials, information, and assets. Instead of dealing with the flood, manufacturers need to work on shoring up the potential “leaks” in the system.

Ready to make the leap away from spreadsheets? E-ISG can help you take your asset management to the next level. Find out how!

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