Breach of Intellectual Property Overview

A breach of intellectual property is what occurs when your intellectual property (IP) rights are infringed upon. This is considered to have happened when your IP has been copied, used, or exploited without your consent. This is a serious offense because IP can be very valuable, as it is often the backbone of a company’s worth. Because of that, laws regarding IP breach are very strict in the United States, although IP infringement is still a huge problem, nonetheless.

Two common and especially costly examples of IP infringement are piracy and counterfeiting. Piracy is the unauthorized reproduction, use, or distribution of IP, while counterfeiting is the imitation of IP in order to take advantage of the original IP’s superior value though an unauthorized, often inferior product. Piracy, counterfeiting, and other types of IP infringement can be considered a violation of civil or criminal law, depending on the type of IP, the jurisdiction in which the offense occurred, and the type of violation.

Nonetheless, as of 2011, counterfeit trademark and copyright works accounted for $600 billion in trade worldwide, or 5% to 7% of the global economy. Because of the obvious prevalence of this threat, as well as the evolving technology by which it is committed, individuals and businesses must be prepared to both protect themselves and act in their own defense, should an IP breach be committed. If the necessary steps are taken, however, the threat of IP infringement can at least be minimized.

Modern IP Theft

Although IP theft is an age-old problem, and some IP can still only be attained by a physical breach, the shape of the modern digital world has made IP theft much easier. Thanks to advances in technology, increases in mobility, globalization, and the anonymity of the Internet, IP is more vulnerable than ever.

Conversely, thanks to the very same forces, IP is also more valuable than ever. According to a 2015 study, IP accounts for more than 80% of market value. It is no surprise then that IP theft has grown with it, although compared to other cybercrimes like credit card, health, and personal information theft, IP theft has garnered far less media attention.

On the consumer end, one major reason for this could be that there is less direct impact on the public caused by IP theft—rather than being immediate and clear to see, the costs incurred from IP theft tend to be spread out over months or years and felt in ways that are difficult to connect with the original incident. Meanwhile, on the corporate end, companies are rarely eager to publicize or report instances of IP theft due to the potential damage to their brand image and reputation. High profile incidents of IP theft can quickly cost companies:

  • Credit ratings
  • Brand reputation
  • Customers
  • First-market advantage
  • Profitability
  • Entire business lines

Because of the difficulty in accurately assessing the true cost of IP theft and the unpopularity in publicizing it, the dangers of IP theft are often overlooked and neglected by companies. This is unfortunate, since IP theft is more widespread than ever, both in who is doing it and what they are going after.

Potential perpetrators of IP crime include:

  • Former and current employees
  • Competitors
  • Criminal organizations
  • Recreational hackers
  • Foreign nations

Thanks to the worldwide reach of the Internet and the relative anonymity it affords, as well as the increasing ease of stealing corporate data in bulk, these criminal actors can go after increasing amounts of IP data. The most valuable data is that which can be monetized in the shortest amount of time, like trade secrets and proprietary business information.

Trade secrets can include:

  • Drug trial data
  • Chemical formulas
  • Manufacturing processes
  • Unique designs

Proprietary business information can include:

Additionally, copyrighted data, like software code, is also increasing becoming a popular target of IP theft.

With such a wide swathe of data being targeted, IP theft affects nearly every sector and industry. It is therefore paramount that one assess the risks surrounding their IP, its potential for loss, and the cost a loss could have on their company. By doing so, one can then craft a better cyber security apparatus to counter IP theft and protect their valuable assets from criminal actors around the world.

If you need further help understanding the negative effects of the breach of intellectual property, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.