Intellectual property theft may not be discussed as much as data breaches that see customers’ credit card and other personally identifiable information stolen by hackers. But online theft of IP is a growing concern in tech, according to a new survey by Deloitte, Cyberattackers and Your Intellectual Property.
That concern is even higher within the automotive industry, where 64% think it will increase in the next year, and the concern is highest within power and utilities where 69% think it will rise.
Deloitte’s survey of more than 2,500 professionals encompassed banking and other financial services, retail, wholesale and distribution, travel and hospitality, insurance, Internet, IT and other tech companies.
Of those surveyed, 32% admitted they didn’t even know if their own company had suffered IP cybertheft in the past year. Twelve percent said they had certainly suffered IP cybertheft.
One-fifth of professionals suspected employees and other insiders would be most likely to steal IP online. In the automotive industry, one-third of tech professionals suspect cybertheft of IP would be an inside job.
Only 10% of professionals thought cybertheft of IP would be most likely perpetrated by nation-states and only 12% thought it would be most likely perpetrated by activist organizations, despite the popularity of shows like Mr. Robot that popularize that idea.
Intellectual property includes everything from drawings, plans, and employee training materials to a range of trade secrets, internal company know-how, research and development.
Rather than any tangible asset, a majority of a company’s value these days is found in its IP, with rare exception.
Across the S&P 500, companies’ total value consisted of 87% intellectual property and just 13% tangible assets in 2015, according to a report from Ocean Tomo, the IP merchant bank.
Getting over IP theft involves figuring out what company secrets were accessed, by whom and when, where they may have been distributed, how a company, its customers and partners could be impacted by the IP theft, and explaining what happened to investors, while also figuring out what legal action to take, and how to tweak IP to regain a competitive advantage if one has been lost.
For some tech startups, good IP is a deciding factor that leads venture investors to back them. It’s also, very often, the “secret sauce” that brings customers to buy from a startup and not an incumbent industry leader.
Losing IP could be disastrous for early stage tech companies which typically don’t have legal protections such as patents granted, and trademarks secured, for everything they’re working on and releasing to the market. So if IP cybertheft actually does increase, startups could be among those most dramatically harmed.