It is extremely important for organizations and individuals to assess and protect their intellectual property. Intellectual property risk management is different from other forms of risk management because it works with something that is intangible. Intellectual property comes from the human mind. It is the result of imagination developing into physical production of goods and services in the real world as well as producing the maximum value of those goods and services.
Intellectual property will define an organization or individual. It provides a uniqueness through an extension of self. It is a brand and a reputation. And it defines a culture that impacts decision making, strategies, clients, goals, and visions.
But as with all areas of business, there are rewards and risks when it comes to intellectual property. Therefore, the goal of intellectual property risk management is to ensure the organization understand risks involved and then properly mitigates them.
The mitigating areas of Intellectual property are trademarks, patents, copyrights, and trade secrets. And with each of these comes much greater risks than most companies realize. Companies must mitigate risks through protecting their trademarks, the words and symbols that define their identity in the marketplace. They must protect their patents to keep their share of the market and artists are especially vulnerable to copyright losses. It is a fine line between drawing inspiration from a song, sculpture, or painting or simply copying it for one’s own gain.
Intellectual property risk management is also necessary because intellectual property is seen as being easier to copy than other forms of property. Counterfeiting is a huge source of loss in the marketplace, especially when it’s done by other countries. China is well known for openly counterfeiting products and brands, with Western companies being unable to find solutions.
Therefore, directors, managers, and board members must have an understanding of Intellectual property risk management in order to successfully analyze and mitigate risks.