“COVID-19 poses new cyber threats to Intellectual Property” warns KPMG
15 October 2020
WORKING IN collaboration with Lloyd’s, KPMG has just published a report highlighting the new threats posed to Intellectual Property portfolios by a changing risk landscape that’s evident under COVID-19.
Entitled ‘Safeguarding Intellectual Property to Enhance Corporate Value’, the report duly examines the increasing importance of Intellectual Property as a driver of corporate value, specifically drawing attention to the risks and opportunities facing businesses.
The document notes that many corporate leaders are not aware of the value of their business’ Intellectual Property. Neither are they involved in the risk planning around it which can leave valuable businesses exposed to risks that threaten their intellectual capital. They may also fail to maximise returns on their companies’ Intellectual Property portfolios.
As businesses race to fully digitise their processes and deploy a remote workforce in response to the pandemic, in parallel they’re exposing their Intellectual Property to a range of new risks. In particular, the report identifies risks that come from rising cyber security threats. With vulnerability most prevalent in the development phases of Intellectual Property, remote working makes it more difficult for organisations to protect confidential information from cyber criminals.
Driver of corporate value
Paul Merrey, insurance partner at KPMG UK, explained to Security Matters: “Intellectual Property is becoming an increasingly important driver of corporate value. Without proper valuation or risk management processes in place, businesses face failing to capitalise on their Intellectual Property portfolios, not to mention potentially damaging them.”
Merrey continued: “Currently, insurance offerings in this space are somewhat limited, but insurance can play a role in safeguarding value. There are major opportunities for those willing to go beyond covering the legal costs associated with Intellectual Property infringement as existing solutions do and, further, provide more comprehensive cover that demonstrates a greater appreciation for the value of Intellectual Property itself.”
The report points to the risks that surface throughout the Intellectual Property lifecycle, from the moment work starts on R&D through to the later stages, including monetising Intellectual Property portfolios. It also includes key actions risk owners can take to minimise the risk to their IP portfolios. These include:
*Mitigating risks during the creation and development processes of Intellectual Property by signing Non-Disclosure Agreements with employees and business partners, articulating ownership rights and safeguarding access to information
*Keeping Intellectual Property secret before its registered and in the public domain by following the guidance of domestic legislation in each Intellectual Property jurisdiction and providing regular staff training on handling confidential information
*Maximising the value of Intellectual Property through registration by selecting the right type of Intellectual Property and deciding how broad or narrow the registration should be, as well as thinking through the geographical scope of the Intellectual Property rights themselves
*Enforcing rights during monetisation of Intellectual Property by forming ‘rainy day’ funds, creating patent thickets and carefully monitoring licensing agreements, including conducting compliance audits
*Having a clear market reputation: companies protecting their Intellectual Property will help to deter potential infringers
Transferring the risks
Dr Trevor Maynard, head of innovation at Lloyd’s, concluded: “This is the first of three in-depth reports on key intangible assets that we intend to produce. Modern companies must protect Intellectual Property assets in the same way that they do physical assets. Insurance is a key way of transferring the risks.”
At present, the Product Innovation Facility at Lloyd’s is working with its myriad customers to create new insurance solutions in this space.