India: The Leak Points

Last Updated: 27 September 2013
Article by Srinjoy Banerjee

On most occasions, try as you might to contain, there may be potential leak points of the Intellectual Property (IP) which otherwise was so carefully guarded. As a practitioner and from the point of view of the IP owner, one of the scariest moments is when you realize that all your secrets are out there for the world to see and exploit.

The trade secret, which you had managed to keep under lock and key for the last 100 years is now in the hands of your competition!!

The trade name, which was brainstormed heavily as you were trying to launch the product, is no longer yours!!

The patent is miraculously re-engineered by your competitor!!

Another literary work went down the merry road of inspiration!!

Twist of fate, roll of the dice or calibrated and malafide affirmative action?

Where are the Leakpoints?

Blame it on Technology!

The ease with which data can move now is mind boggling. Before you can even start contemplating a method by which the data will move, another point of entry has already been executed. Whereas in a pre-computer era, data could not be moved from Point A to B without a tedious process, now with the blink of an eye, data can move or be moved across the globe using the World Wide Web.

The force of any patent, design, trademark or copyright comes from its inception, conception, the research and development (R&D), and finally creation of the product and securing it in the most appropriate form. An idea is envisioned. A team works on the research and development of the idea – time and money is expended. A slow process of research goes in before the EUREKA moment!! A business team thereafter would look at the economics of it before finally coming out with the product with the go ahead of the board. It would be at this stage that the business would look at securing the rights in the inherent IP in the product. This period between the final development of the product and its launch in the market is the critical time when most IP thefts are likely to happen. The malafide "economic sense" of stealing at this stage will be at its peak.

The launch of the product and its running at the "Box Office" would cause a lot of interest in the market. Naturally a competitor would be desperate to know the methodology used in terms of a patent or design to capitalize on the goodwill being generated from the sale of the product.

In terms of a copyright, the tune or the concept may be picked up and may be given the definition of "inspiration". Copyright violations can happen both in terms of a concept stolen, whether in a cinematographic, literary, artistic or musical work. There is a tendency to copy and to use the IP of others surreptitiously. Where the Internet has been a catalyst of this behaviour, it has also equally enabled its detection and subsequent stoppage.

The threats to the IP can come from both external and internal sources and resources. Exposure of the information should therefore be very restricted to only a very select "need to know" audience or stakeholders. Externally your competitors and a multitude of hackers are "on the job" as we speak, to try and extract whatever information possible from the net. The forms of this intrusion can be by way of :-

  1. Hacking
  2. SQL Injections
  3. Viruses/Malware/Trojans
  4. Phishing
  5. Identity theft, etc.

Similarly there are internal resources at play who are extracting information for financial and other gains. This can be in the form of:-

  1. Email Web Access
  2. Data Storage Sites
  3. Flash drives
  4. CDS
  5. Printing
  6. Smart Phones, etc.

The forms are endless and the above are only examples of the types. However the outcome of all this is only one - that the data or information is compromised. This can possibly spell doom for any business, fatally crippling it.

The plugs for the holes?

We would be living in a fool's paradise if we imagine even for one moment that the above will not happen in any organization. Not preparing for such an eventuality would be suicidal. As long as the information has value, there will be those who will do their best to obtain this information, clandestinely. The actions to plug this hole are in its prevention and cure. Therefore the two fold strategy has to be :-

  1. Pre-emption
  • Robust Policy

A very strong policy needs to be created to incorporate both the organization's internal values with the law for the time being in force. The strength of the policy would be gauged as to how it disciplines the resources both in terms of the dealings internally as well as with the world at large. From the point of view of an organization this becomes critical as it is after all the human resource one is dealing with here, and clarity in the policies of the organization would be key to the success of these policies.

  • Education of Internal Resources

Educating the internal human resources is vital to curtail IP theft. Education would mean that the internal resources must be made aware of the law, the policies and the legal consequences of any malafide action.

  • Educating the external world

One strategy that can be adopted is to clearly state the policies of the organization on the company website and other means such as advertisements etc, which would inform the public at large that the organization has a clear take on any infringement of its product and also any theft of its IPs

  • IT Audits

The security policies of the organization's Information Technology department would also be tested in the event of an IP theft. Accordingly regular testing of the Server strength and online security of the internal database is a must. The External threats will enter an organization's database from any hole it can find in the system firewall.

  1. Response
  • Immediate Response

The robustness of the policy will tell how soon the issue is addressed and will close the breach either in a rush or slowly. There is usually a time lag between the breach and its discovery and further the discovery and the response. If the time period of this is short the breach is contained more effectively. A delay in this could be fatal.

  • Enforcement

Enforcement is the ultimate step that an organization takes to secure itself and its assets. However these need to reflect both in terms of the internal policies as well as the law in force. As per Indian laws the various IPs have certain penal provisions. Coupled with this are the provisions of the IT Act and the CrPC giving teeth to the provisions of Trademarks and Copyright.The IT Act defines cites the specific instance of such IP theft using Computer/technology and its penalties which are both in terms of fines as well as imprisonment. The laws of the country both the Criminal procedures and the Acts are being constantly amended to include newer definitions to contain such illegal activities.

As long as there is some "property" there will always be the "propensity" to copy, steal, and borrow. This is a fact etched in stone! However the policing of such IP theft have to be a combination of education and enforcement – carrot and stick policy, to control the "propensity" and save the "property".

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Srinjoy Banerjee
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