Intellectual Property Protection Strategy

Intellectual PropertyHow much information do you think a humble 8GB USB stick can hold? Let’s run some numbers quickly: a typical 1,500 words Microsoft Word document should be about 20kb which means you can save roughly 400,000 documents on an 8GB stick or 3,200,000 on a 64GB one. More than three million documents on a $50 storage device. Impressive.

There was a case in the Supreme Court of New South Wales back in 2004, before USB sticks were invented, Woolworths v Olson where an injunction (a restraint of trade) was sought, and granted against Mr Olson by his then former employer Woolworths. What happened?

Mr Olson had access, through his employment, to valuable confidential information codenamed “Project Mercury” – a software system designed to transform Woolworths’ product supply procedures. Only key employees were privy to this information, and Mr Olson was one such employee. He received and accepted a job offer from Franklins, a direct Woolworths’ competitor. On the last day of his employment with Woolworths, Mr Olson sent by email several files relating to Project Mercury, from his work computer to his wife’s home computer. These were extremely confidential and valuable. Woolworths discovered the theft and took Mr Olson to court seeking a so called “restraint of trade”, that is, a court order preventing Mr Olson from being employed by Franklins for at least some time. Initially losing at the first hearing, Woolworths was granted an injunction against Mr Olson by the NSW Court of Appeal.

Mr Olson did not have a USB stick and only a handful of files, not millions, were stolen. Today though, an entire corporate database or millions of files can be stored on a small storage device and taken to the outside world without anyone noticing anything (Edward Snowden anyone?).

A Value Worth Protecting

Unlike tangible property, it’s hard to put a dollar value on intellectual property. How much does information cost? Is it worth protecting at all? Do you want to find out the hard and expensive way or would you rather prefer to safeguard your business against intellectual property loss or damage?

Even though most businesses realise that intellectual property must be protected from competitors, too many still make a mistake of assuming that there’s little can be done to protect confidential IP from its own workers. While it’s normal and indeed commendable to trust your employees, it’s equally foolish not to have some protective measures in place if things go wrong, which they do sometimes.

Here is a list of measures you can implement in your business to minimise exposure to intellectual property theft or unauthorised use:

  • Document control and management system: as an intellectual property owner, you should be able to know at any instance what kind of access and to what kind of information is available to any particular person in your organization at all times. An audit log must be maintained showing who accessed what and when that will help identify a potential breach should a suspicion arise;
  • Employee education: make sure your workers are aware of the intellectual property’s value and of the consequences of tempering with it in an unauthorised manner;
  • Email control system: keeping a log of email traffic is both preventative and investigative tool that will help safeguard your IP (recall the Woolworths case above);
  • External email control system: with web based email services such as Gmail or Hotmail, it’s easy to bypass an internal email system and send away intellectual property through one of these services – your business should be protected from that by implementing a system which will not allow access to external email services;
  • Review policy: the likelihood of IP theft will be reduced if every employee is aware that the digital trail they leave behind when they decide to move on will be reviewed to ensure no breach of intellectual property has occurred.

To help you navigate through the complexities of intellectual property issues, Hollingworth & Spencer Lawyers are available for any assistance your business may require. To quote one famous American, “By failing to prepare, you are preparing to fail.” It was true in 18th century, and still true in 21st.