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Managing intellectual property.



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It would be inexcusable for a company to have no idea of the value of its inventory or plant and equipment. But, in fact, many companies know neither the full extent of intellectual (intangible) properties they own nor what they are worth. Many specific responsibilities for managing intellectual property fall to the human resources The fancy word for "people." The human resources department within an organization, years ago known as the "personnel department," manages the administrative aspects of the employees. , legal and IT functions. But the finance function should coordinate and verify these efforts as it does with payroll, employee benefits and inventory Ultimately, protecting IP is everyone's responsibility. Consider these top action items for protecting your company's intellectual property:

FINANCE TASKS

[check] Inventory all intellectual property. At a minimum, inventory all IP assets and identify those intangible assets that are most critical to your business. Ideally, companies should perform periodic audits of IP. They are a must when significant events occur such as public/private offerings, mergers and acquisitions, or pending lawsuits. As part of an IP audit, quantify the value of the intangible assets as well as examine and evaluate strengths and weaknesses in the procedures to protect each intangible asset.

[check] Prioritize an action plan for correcting deficiencies and reducing risk identified in inventorying/auditing IP. Form a plan to capture future IP rights developed and acquired.

[check] Consider insurance strategies. First, consider potential claims. Speak to commercial insurance brokers and discuss various policies that might be appropriate. These could include IP defensive insurance, IP value insurance, patent enforcement insurance, and technical transfer insurance.

LEGAL TASKS

[check] Have basic agreements in place and ensure they're used. These include nondisclosure agreements (NDAs), proprietary information agreements and independent contractor A person who contracts to do work for another person according to his or her own processes and methods; the contractor is not subject to another's control except for what is specified in a mutually binding agreement for a specific job.  agreements. Have vendors and customers sign NDAs. Don't forget to have interview candidates sign an applicant nondisclosure agreement and have future employees read and sign an employee representation letter that assigns all IP rights to the employer.

IT TASKS

[check] Have a secure IT network and computer systems. In addition to having passwords and firewalls, consider an intrusion-prevention system An intrusion prevention system is a computer security device that monitors network and/or system activities for malicious or unwanted behavior and can react, in real-time, to block or prevent those activities.  and data loss/leak-prevention software. For certain industries, digital rights management software tools might be appropriate to automate the workflow and tracking of legally protected IP.

[check] Have robust data retention policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental . Consider encrypting proprietary information. Penetration testing (or simulated attacks) may also be appropriate depending on the company's risk assessment.

HR TASKS

[check] Ensure employee handbook An employee handbook (or employee manual) details guidelines, expectations and procedures of a business or company to its employees.

Employee handbooks are given to employees on one of the first days of his/her job, in order to acquaint them with their new company and
 and personnel policies provide guidelines for protecting IP. Stress the employee's obligation to protect IP. Provide e-mail guidelines such as not using e-mail to send proprietary information. Consider having an electronic resources policy within your employee handbook that deals in depth with voice mail, data use and appropriate Internet use, as well as access and storage protocols.

[check] Establish physical procedures. Have basic safeguards in place such as limiting exposure to visitors and restricting access to IP on a need-to-know basis. Do background checks. Shred all discarded documents that contain proprietary information. Embed all electronic documents with "confidential & proprietary" and stamp all hard copies similarly

[check] Establish systems and additional safeguards. Companies should send out periodic reminders of everyone's responsibility to protect all proprietary information and have a culture of zero tolerance The policy of applying laws or penalties to even minor infringements of a code in order to reinforce its overall importance and enhance deterrence.

Since the 1980s the phrase zero tolerance has signified a philosophy toward illegal conduct that favors strict imposition of
 for trade secret misappropriation misappropriation n. the intentional, illegal use of the property or funds of another person for one's own use or other unauthorized purpose, particularly by a public official, a trustee of a trust, an executor or administrator of a dead person's estate, or by any . Inspect work areas regularly.

[check] Ensure the training and education of all employees on all aspects of IP and protection thereof Train hiring managers to protect trade secrets during the interview process. Hold regular seminars to educate employees on the various types of IP, publication rules and security measures Noun 1. security measures - measures taken as a precaution against theft or espionage or sabotage etc.; "military security has been stepped up since the recent uprising"
security
; and refresh them on the company's policies and procedures.

--By Robert Frank, CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. , of the Santa Clara Santa Clara, city, Cuba
Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba.
, Calif., office of Accretive Solutions. His e-mail address See Internet address.

e-mail address - electronic mail address
 is rfrank@accretivesolutions.com.
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Author:Frank, Robert
Publication:Journal of Accountancy
Date:Aug 1, 2008
Words:598
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