To create the accurate estimates of cyber risk needed to make informed decisions, executives must understand exactly how the full range of impacts might play out over time. In a 2019 paper, Santacreu, Ana Maria. 2023 Dentons. Depending on the case, this can include: Coming soon is the launch of the Ideas Powered for Business website, especially developed for SMEs in collaboration with national IP offices and other stakeholders. Trade secrets can include drug trial data, a paint formula, a manufacturing process, or a unique design; proprietary business information might include a geological survey of shale oil deposits, merger plans, or information about business negotiations and strategies. The relationship between intellectual property protection and international trade has been one of the most controversial issues in global negotiations in recent years. Compliance and regulatory disclosure requirements generally shape corporate attention to the impact of cyberattacks. To stay logged in, change your functional cookie settings. is a partnership law firm organized under the laws of the Peoples Republic of China, and is Dentons' Preferred Law Firm in China, with offices in more than 40 locations throughout China. The impact of intellectual property regimes on the enjoyment of right to science and culture Special Rapporteur in the field of cultural rights Select Intellectual property regimes represent an important field of international law. Explore the Cyber Risk Management collection, Though IP theft is hardly new, and some IP may still be attainable only through physical means, the digital world has made theft easier.2 According to US Intellectual Property Enforcement Coordinator Danny Marti, Advancements in technology, increased mobility, rapid globalization, and the anonymous nature of the Internet create growing challenges in protecting trade secrets.3 (See the sidebar US administrations commitment to trade secret protection.). 75, pp. 2 Royalty payments have also been used as a measure of technology diffusion in other analyses. These investigations have been performed for privately held companies, private institutions, not-for-profit entities and major, publicly held corporations. Trading Ideas between Countries. Federal Reserve Bank of St. Louis, On the Economy Blog, April, 17, 2017. Product sales finally return to normal after a year, but business disruption across multiple departments, caused by the redirection of company resources to deal with the breach, drags down operating efficiency. Ocean Tomo, 2015 annual study of intangibleasset market value, March 5, 2015. Background: Intellectual property (IP) is a substantial competitive advantage in the health care industry. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb. Reforms in IPR are commonly presumed by trade economists to raise imitation costs, reduce access to global information and place firms in developing countries at a competitive disadvantage in global markets (Helpman, 1993, Lai and Qiu, 2004). Beyond intellectual property, Mr. Fancher has been active in providing innovative solutions and strategies to legal departments in areas of workforce transformation, technology and workflow assessments, and contract lifecycle management implementation. Rules include an OMB rule directing all federal agencies to have a notification policy for PII; relevant legislation may include the HITECH Act, the Federal Trade Commission Act, and the VA Information Security Act. By limiting or otherwise negatively impacting a companys rights to protect its own technology, data or intellectual property, these types of agreements and requirements may impede both the companys ability to compete today as well as its ability to retain and improve on this intellectual property, thereby inhibiting chances of future success. They're often the very ways in which advanced societies achieve cooperation. Innovation, understood as the complex process of taking an idea to market, has proven to be a major challenge for entrepreneurs and SMEs. Further, the Commission has neither approved nor disapproved its content. Have conditions in a foreign jurisdiction caused you to relocate or consider relocating your operations to a different host nation? I found that royalty payments are positively related to the quality of IPR protection a country provides, measured by the Intellectual Property Protection Index from the Global Competitiveness Index historical database from the World Economic Forum. Royalty payments reflect charges for the use of foreign IPR, which can be used as a measure of knowledge diffusion. It helps that theres plenty of precedent, based on those high-profile data breaches, to help executives calculate their companies exposure in case of a PII leak. Where is it possible to reduce the number of people with access to IP? Good protection and enforcement of intellectual property rights (IPR) are key to promoting international technology transfer, which is important for economic growth, especially in developing economies. Johns last tour in the Navy was Chief of Staff for Admiral Mike Rogers, who is now Director of the NSA. The first section deals with historical and cultural influences (and how culture is influenced by them) regarding technology and the many interpretations of . 304 (4th ed. If you are not already a client of Dentons, please do not send us any confidential information. There is a positive relationship between the amount of royalties paid to the world (that is, the amount of IP received from other countries) and the Intellectual Property Rights Protection Index. A company that owns IP rights will have a higher competitive advantage and legal protection against counterfeiting. Globalization of Innovation and the Increase of Knowledge Sharing, What Does Chinas Rise in Patents Mean? Examining Intellectual Property Rights, Innovation and Technology STAY CONNECTED , For additional analysis, see Santacreu, Ana Maria. We know from the facts set out in Thing to Things scenario that the company attributes 25 percent of its total revenue to product lines impacted by the stolen IP. A vague and dreaded threat becomes more defined, and the enemy starts to look like one that can be vanquished with proactive strategies and defenses. ! D@A\7a6XeGANB*`CoL f6a\1 A Closer Look at Chinas Supposed Misappropriation of U.S. The legal discourse on the legal and human rights issues of artificial intelligence (AI) is established, with many a detailed legal analysis of specific individual issues (as outlined in Sections 3 and 4 in this article). The WIPO Magazine is intended to help broaden public understanding of intellectual property and of WIPOs work, and is not an official document of WIPO. Her research interests include international trade, international macroeconomics and economic growth. With this contextual awareness of risk, executives can ask hard questions to probe how effectively the company is managing its IP in addition to how well the cyber risk program is integrated into that process. He is active with the American Heart Association, having served as the Past-Chairman of the Southeast Affiliate Board, while also serving on the National Board and Audit Committee. This blog offers commentary, analysis and data from our economists and experts. They include not only well-understood cyber incident costssuch as expenses associated with regulatory compliance, public relations, attorneys fees, and cybersecurity improvementsbut also less visible and often intangible costs that stretch out over months or even years, including devaluation of trade name, revoked contracts, and lost future opportunities. The Way Forward for Intellectual Property Internationally Results suggest that while stronger IPR protection can ultimately reap rewards in terms of greater domestic innovation and increased technology diffusion in developing countries with sufficient capacity to inno- vate, it has little impact on innovation and diffusion in those developing countries with- out such capacity and may impose additional . Each SME can be reimbursed up to a maximum of EUR1,500. Jess Benhabib et al., Present-bias, quasi-hyperbolic discounting, and fixed costs,, JR Reagan, Ash Raghavan, and Adam Thomas, Quantifying risk: What can cyber risk management learn from the financial services industry?,, John Levis et al., Wizards and trolls: Accelerating technologies, patent reform, and the new era of IP,. Influence of Information and Digital Technologies on Intellectual Property Secure patent rights contribute to innovation since they address the risks people face when they develop new technologies and worry their ideas will be stolen. See also Chairman Jay Clayton, SEC Rulemaking Over the Past Year, the Road Ahead and Challenges Posed by Brexit, LIBOR Transition and Cybersecurity Risks (Dec. 6, 2018), available at https://www.sec.gov/news/speech/speech-clayton-120618. 8dWN' BGKmPm3u1 3{_it The digital economy has greatly impacted the intellectual property law that can be witnessed through cyber squatter legislation and significant legal and economic protection developments. 2004). Given their importance to growth, market share, and innovation, IP and cyber risk should rightly sit with other strategic initiatives managed at the C-suite level. Compared with more familiar cybercrimes such as the theft of credit card, consumer health, and other personally identifiable information (PII)which regulations generally require be publicly reportedIP cyber theft has largely remained in the shadows. He was recently published in U.S. John joined Deloitte after retiring from the U.S. Navy after 30 years of service. Intellectual property in information technology concerns how innovations in the IT field are protected in order to continue advancements and encourage even more innovation. For example, countries with lower GDP per capita (such as Argentina, India and Peru) tend to have lower IPR enforcement, whereas countries with higher GDP per capita (such as the U.S., Ireland and Canada) tend to have higher IPR enforcement. Intellectual Property Rights in Digital Media: A Comparative Analysis Chinas high payments for foreign technology may signal improvements in IPR enforcement. These kinds of scenarios keep executives up at night for good reason: Intellectual property (IP) is the heart of the 21st-century company, an essential motor driving innovation, competitiveness, and the growth of businesses and the economy as a whole. Are your controls and procedures designed to detect: malfeasance by employees, contractors or other insiders who may have access to your technology and intellectual property; industrial, corporate or other espionage events; unauthorized intrusions into commercial computer networks; and. With even more serious implications, 30 days after the breach alert, a prominentSilicon Valley blogger reports evidence that the foreign nation-state is reverse-engineering the networking product, suggesting that it could beat Thing to Thing to market and undercut the firm on price. Mr. Fancher has over 30 years of experience assisting clients and leading practices in forensic, dispute consulting and legal transformation. In addition, the company retains attorneys and a forensics firm to investigate the event, and a cybersecurity firm to help triage and remediate the breach. This website and its publications are not designed to provide legal or other advice and you should not take, or refrain from taking, action based on its content. Supplementary Information: The statements in this CF Disclosure Guidance represent the views of the Division of Corporation Finance. You will now be taken from the global Dentons website to the $redirectingsite website. Don Fancher is a Deloitte Risk & Financial Advisory Principal with Deloitte Financial Advisory Services LLP where he serves as the Global Leader of Deloitte Forensic as well as the Co-Leader of Deloittes Legal Business Services practice. If you need help with intellectual property rights, you can post your legal need on UpCounsel's marketplace. Particularly important is to understand the value of, and safeguard, IP in its early, emerging stages. For example, China is shown to be far above the trend line, indicating that although China has lower GDP per capita and lower IPR enforcement, it is still a significant player in purchasing technology from the world. It will offer new tools and services specifically tailored to the SME sector, such as a visualization map to find useful services, a multi-language chatbot, a training area and a section with selected useful tools. A scenario-based methodologypositing specific breachesof varying scope and severity, and modeling their impactpermits a realistic and revealing exploration of the IP life cycle to more deeply identify potential risks in the movement and storage of sensitive company information, whether they be external,internal, malicious, or accidental. The U.S. economy has only grown larger, and it's inefficient for someone in a single industry to try and do everything. Protecting . Positive impact of information technology: Ease of access: With the various advances made in the field of information technology, it is now possible to access information on a certain subject, tag, and even geotag it, categorize it and store it for review later. 1. 68, Issue 2, pp. Please click Confirm below to continue. The territorial level of protection will depend on each companys business strategy and growth plans. Company A wants to launch a new product on the market and they need technology already patented by another company, Company B. Read more about the author's work. Protecting the identity of products with a trademark and their appearance with a design is critical in the event of unauthorized use by a third party. With this in mind, the European Commission asked the EUIPO to spearhead a number of initiatives to support SMEs through their startup and scale-up journeys. In total, over time, Thing to Thing analysts calculate that this one IP cyber theft incident costs the company over$3.2 billion. property laws and their economic impact. %PDF-1.2 % This royalty rate is used to ultimately assess value. Have you provided access to your technology or intellectual property to a state actor or regulator in connection with foreign regulatory or licensing procedures, including but not limited to local licensing and administrative procedures? [4] In addition, a number of existing rules or regulations could require disclosure regarding the actual theft or compromise of technology, data or intellectual property if it pertains to assets or intangibles that are material to a companys business prospects. A company that owns IP rights will have a higher competitive advantage and legal protection against counterfeiting. This spawns various initiatives, including an IP inventory, classification, and protection program and enterprise security infrastructure upgrade projectsall of which drive additional costs. The President5continues to remain vigilant in addressing threatsincluding corporate and state-sponsoredtrade secret misappropriationthat jeopardize the United States status as the worlds leaderfor innovation and creativity. Therefore, economic policies aimed at improving the quality of IPR protection are key to promoting technology transfer and development. He has authored numerous publications, provided presentations, and been quoted extensively in periodicals and publications on subjects around a variety of regulatory compliance, forensic, dispute and legal technology issues. Impact of Technology on Enforcement of Intellectual Property Rights MAJOR Technology is making itcheaper to copy, transfer, and manipulate information and in- tellectual property. DR, Written by: The more cooperation is used in an industry, the more important proper coordination comes into play using contracts, markets, and property rights. reimbursement of 75 percent of the IP pre-diagnostic service (IP scan). Whether developing technology in-house or acquiring it from external sources, IP rights have a central role to play in every companys journey to the market. 2 According to US Intellectual Property Enforcement Coordinator Danny Marti, "Advancements in technology, increased mobility, rapid globalization, and the anonymous nature of the Internet create growing challenges in protecting trade secrets." 3 (See the . Information Technology in Business: Benefits & Limitations. Although this correlation should not be interpreted as having a direct causal effect the mere registration of an IP right is not sufficient to trigger growth it can signal an SMEs stronger ability to succeed in its innovation process a key factor for growth and to survive in the highly competitive business world. These have included both individual employee and institution-wide schemes for misappropriating funds and/or improperly reporting asset values and financial performance. IP rights must keep up with recent advances in order to promote creativity and investment in that creativity. Examples include: We encourage companies to assess the risks related to the potential theft or compromise of their technology, data or intellectual property in connection with their international operations, as well as how the realization of these risks may impact their business, including their financial condition and results of operations, and any effects on their reputation, stock price and long-term value. Royalty payments have also been used as a measure of technology diffusion in other analyses. Other intellectual property rights. Intellectual property can constitute more than 80 percent of a single companys value today.1 Its no surprise, then, that thievesarmed with means, motive, and opportunityare in hot pursuit. Losing customer data to hackers can be costly and embarrassing, but losing intellectual property to cyber thieves could threaten a companys future. 1. Valuation of both the impact of the stolen IP and the lost contract employs the following generally accepted principles: In addition to utilizing these principles to calculate the lost IPs value, the company assumes the IP to have a useful life of five years. By Maria del Coro Gutierez Pla and Lynn Burtchaell, EUIPO SME Programme, European Union Intellectual Property Office (EUIPO), Alicante, Spain. The small number of people with physical access limited the pool of suspects, often making such theft a risky proposition. Generative AI, which uses data lakes and question snippets to recover patterns and relationships, is becoming more prevalent in creative industries. The reasoning behind cooperation and financing are basic and utilitarian: people have adopted the mechanisms of property rights and markets simply because they work. An IP pre-diagnostic service or IP scan of your business may be a good first step. Some have enough technological resources to complete the innovation process internally, but others need to collaborate with external sources of knowledge. mCa#8/# DtfEFc t2bE##CrX@6QA(0Ge(m* Most cases receive no widespread attention, perhapsbecause the impact to the public is less directand because, considering the potential brand and reputational damage, companies have little incentive to report or publicize such incidents. Fortifying Health Care Intellectual Property Transactions With Blockchain The Ideas Powered for Business SME Fund opened for applications from EU-based SMEs on 11 January 2021. Innovation and Intellectual Property A Closer Look at Chinas Supposed Misappropriation of U.S. Information technology impacts on innovation - ResearchGate 6LinkedIn 8 Email Updates, Accounting and Financial Reporting Guidance, Compliance and Disclosure Interpretations, No-Action, Interpretive and Exemptive Letters, https://www.sec.gov/rules/interp/2018/33-10459.pdf, https://www.sec.gov/news/speech/hinman-applying-principles-based-approach-disclosure-031519, https://www.sec.gov/news/public-statement/libor-transition, https://www.sec.gov/news/speech/speech-clayton-120618, https://ustr.gov/sites/default/files/2019_Special_301_Report.pdf, http://ipcommission.org/report/IP_Commission_Report_Update_2017.pdf, https://www.theglobalipcenter.com/wp-content/uploads/2019/03/023593_GIPC_IP_Index_2019_Full_04.pdf. The Deloitte Review article Wizards and trolls: Accelerating technologies, patentreform, and the new era of IP outlines nine dimensions that IP strategy should encompass.13 However, as the means and motive for cyber theft increase, leaders should move to include acyber risk dimension in the companys IPmanagement strategic framework (figure 3). Impact of Digital Economy on Intellectual Property Law - ResearchGate Copyrighted data, such as software code for data analytics, is also now a popular target. See e.g., IAN . SMEs may decide, therefore, to have an IP scan carried out before deciding which trademarks or designs rights to apply for. Deloitte Insights and our research centers deliver proprietary research designed to helporganizations turn their aspirations into action. reimbursement of 50 percent of their trademark and design basic application fees at national, regional and EU level; and. 75, pp. E 2 can produce remarkable visuals in styles from aged photographs and water colors to pencil drawings and Pointillism. Under the new regime, user-generated content sharing platforms must obtain the right holders authorization when they grant the public access to copyright-protected content uploaded by their users. The relationship between open technological innovation, intellectual the commercial phase, when products are launched on the market. @r3ac7 How well an organization responds to a breach can mitigate the toll it takesa theft need not cost $5 billion. In addition, it is the access point from which SMEs can sign up for free, personalized intellectual property support in their own language. AI technologies can also surely be used to enhance the detection and possibly even prediction of IP violation. We have highlighted the importance of developing a strategic plan for when and how to make appropriate use of IP rights in the initial stage of the innovation process. If the companys innovation ecosystemextends to partners, suppliers, or third parties, have controls and policies been appropriately extended beyond corporate borders?
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