It is not a secret that over the past decade, IP assets have been growing in value and gradually emerging as the most valuable and critical asset class for many companies. This is especially true for companies involved in technology or any aspect of product research and development. Yet, one issue that often remains unaddressed by business enterprises is the IP-related risk. To make sure that their companies remain on track and their IP remains uncompromised and unchallenged, corporate management and boards of directs must take IP risks seriously and create strategies to assess those risks. Quite often IP-related risks depend not only on actions of these companies but those of their competitors, unrelated third parties, government agencies and even illegal operators. As trusted counselors to our clients, we continuously import that all companies that increasingly rely on their IP asset base must create specific protocols to:
- Monitor compliance of their employees with internal IP protocols, confidentiality arrangements and trade-secret policies;
- Critically review access to the IP-related information and restrict disclosure only to those individuals whose input is critical to creation and development of the relevant IP;
- Review confidentiality and non-disclosure protocols and agreements with all independent contractors and third-party vendors;
- Review and monitor the IP portfolio with a designated patent counsel to make sure that the existing patents are properly maintained, all maintenance fees are timely paid, and that the newly developed patent applications are adequately protected and prepared so as to not jeopardize the company’s interests and potential patentability of the inventions; and
- Closely monitor patent and IP developments in the industry to make sure that the company’s IP is not infringed or stolen by bad actors.
The questions prudent corporate officers must ask themselves is whether they, members of their companies’ boards of directors and advisers will recognize when IP issues arise to the level of board concern. Similarly, members of the boards must ascertain whether their management can deal effectively with the IP issues and whether suitable and experienced advisers have been engaged to advise the management and the boards on these issues.