The current economic development is private sector-oriented and knowledge-driven. When businesses are at the forefront of economic activity, they need to update and upgrade themselves with market demands and trends. Simultaneously, companies must manage their tangible (physical) and intangible (non-physical) assets. Intellectual property, an important component of every knowledge-driven business, comes under intangible assets. It includes patents, copyright, trademark rights, and design rights on which the growth and success of any business idea depend. The effective application of one or more intellectual property is required for all businesses to gain and maintain their competitiveness in the marketplace, especially true for businesses such as engineering firms.
Importance of Intellectual Property:
Intellectual property provides businesses a basis for
- Preventing copying their innovations,
- Creating a strong brand identity,
- Obtaining valuable competitive intelligence,
- Obtaining venture capital,
- Increasing commercial value,
- Accessing new markets and
- Engaging various business partnerships
Each one of these advantages may be vital to establishing an edge over the competition in the business. And such data that provides an edge over the competition is considered business-critical. It is vital for any business to secure and protect their intellectual property data, innovations, business strategies, future plans, market situation, and analyses.
Intellectual Property Threats and Risks:
Cyber security threats have increased by 600% since the COVID-19 pandemic. Since the beginning of the pandemic, businesses have experienced threats to their intellectual property, as it accounts for more than 80% of any company’s value. Unsurprisingly, hackers look for opportunities to steal or misuse intellectual property.
Intellectual property theft is not an entirely new concept. Previously the intellectual property was attainable only via physical means, but digitalization has made it more accessible.
The US Intellectual Property Enforcement Coordinator Danny Marti stated that “Advancements in technology, increased mobility, rapid globalization, and the anonymous nature of the Internet create growing challenges in protecting trade secrets.”
Intellectual property theft has majorly remained in the shadows compared to other industrial cyber security issues such as consumer health, personally identifiable information, and credit card. Such cases do not get much attention, as companies do not publicize cases considering the potential reputation and brand damage.
Impact of IP Theft on Industrial Companies:
Industries such as manufacturing, pharmaceutical, chemical, food, and engineering have traditionally invested heavily in their intellectual property to maintain competitive advantage. Theft of intellectual property in such a company will have a direct impact on the company, leading to months or even years of potential damages to their business and cause direct and intangible costs to the company. Better known cyber incident costs include regulatory compliance, post-breach consumer protection, customer breach notification, cybersecurity improvements, technical navigation, attorney fees & litigation, and regulatory compliance. Less visible or hidden costs are the value of lost contracts, increased cost to raise debt, increased insurance premium, lost value of customer relationships, and impact of operational disruption. Additionally, companies have to pay for investigations of cyber-attack events. These costs are easier to identify and quantify, but intellectual property thefts are challenging to locate and calculate as they are indirect and deferred costs.
Generally, theft of intellectual property results from targeted cyber-attacks. It may be from competitors, criminals, current/former employees, foreign nation or state actors, and recreational hackers.
Theft of intellectual property and their business data becomes a matter of “when” and not “if”, if an organization has failed to take adequate steps to protect their infrastructure including their intellectual property.
Protecting Intellectual Property through proper Risk Management:
The protection and enabling of valuable innovations are the primary goals of corporate leaders and their stakeholders. To support a business’s future growth and competitiveness through innovation, organizations must build true resilience on the overall IP cyber theft possessing business risks. Strategic industrial cyber security solutions must be introduced by properly analyzing a company’s intellectual property, location, and how that intellectual property is safeguarded. A risk-based approach is necessary to properly evaluate the business risks and deploy necessary resources to protect a business’ intellectual property. Assessments such as risk assessment and gap assessment allow us to understand the full impact of potential misuse or losses of intellectual property theft events, and if the business has adequate protection in place to mitigate such a cyber incident. This leads to better management of risks and taking timely action to prevent an unforeseen event.
At 3WaySecure Consulting, we offer holistic, pragmatic, and sustainable cybersecurity services to protect industrial organizations from evolving cyber threats. We offer services in the areas of risk management, cybersecurity compliance, security testing, and cybersecurity consulting that are tailored to your specific infrastructure and business needs. If you need help regarding the cybersecurity challenges your business faces or advice on ICS/OT security, please don’t hesitate to contact us for more information or to get non-binding advice from our experts.