Your Small Business May Be At Risk of IP Loss or Theft

Today, success in a global market economy depends more and more on producing and protecting intellectual property (IP) assets – products of human creativity and innovation that may be protected by laws on patents, trademarks, copyright, trade secrets and other laws.  Small businesses are key drivers of the U.S. economy, and yet in many cases, they are the most vulnerable to loss of IP rights or theft of their IP.

Perhaps the most fundamental IP concept is that of territoriality - a U.S. patent or trademark provides protection only in the United States.  The creator of IP must secure protection in each country in which protection is desired – normally by filing an application of protection – or face a loss of IP rights.

The economic benefits of intellectual property rights have captured the attention of t thieves and organized crime.  Today, it has become all too common for thieves half a world away to steal a business’s innovative products and even its good name – all at a cost to the rightful owner’s bottom line.  The first step in fighting this theft is to identify and secure protection of your IP.

How Big a Problem is IP Theft?  Which Sectors Are Most Affected?

Piracy, counterfeiting and the theft of intellectual property assets pose a serious threat to all American businesses.  According to the FBI, Interpol, the World Customs Organization and the International Chamber of Commerce estimates, roughly 7-8% of world trade every year is in counterfeit goods.  That is the equivalent of as much as %512 billion in global lost sales.  Of that amount, U.S. companies lose between $200 billion and $250 billion.   IP theft has a major impact at home, too:  according to the U.S. Chamber of Commerce, overall intellectual property theft costs 750,000 jobs a year.  IP theft poses a risk to all industry sectors; those most commonly affected by IP theft are manufacturing, consumer goods, technology, software, and biotechnology, including pharmaceuticals.

How Big of a Problem is IP Theft Among Small Businesses?

While it is difficult to determine the exact scope and extent of the problem, every indication is that copyright piracy, trademark counterfeiting, and patent infringement have become significant problems in the business community in general, including small businesses.  Certainly any small business that exports its IP protected products abroad or sources its products or parts overseas must take into account the potential for rampant IP theft in many countries.

U.S. small businesses are at a particular disadvantage, however, because they may lack the knowledge, expertise or resources necessary to prevent the theft of their ideas and products.  In fact, research conducted by the USPTO this year found that only 15 percent of small businesses that conduct business overseas know that they need to file for IP protection abroad.

Many small businesses also may not have personnel and operations overseas, so they lack the “eyes and ears” needed to be vigilant globally and the theft of their IP can often go undetected.  In addition, small businesses generally do not have the level of access or the resources, such as specialized legal counsel, that may be available to larger companies.

IP Theft