Intellectual Property & Copyrights

Part 1 of 5

Because intellectual property is an integral part of a company’s management practices, Chubb, with the assistance of White and Williams LLP, has prepared this information to help your organization evaluate its intellectual property risk management practices.

Intellectual property principally consists of copyrights, trademarks, service marks, trade secrets and patents. Companies conducting business in today’s brand- and image-intensive marketplace must protect their own intellectual property as well as manage the risk of infringing on others’ intellectual property assets. Most cannot afford the financial burden of an intellectual property lawsuit, the litigation costs of which can average more than $1 million.

The vulnerability of companies to such lawsuits increases in tandem with their dependence on the Internet and electronic communications. For the Web site owner, posting Web site content creates the same legal exposures as those of a print publisher, yet most Web site owners have little or no concept of the associated legal responsibilities. Worse yet, a stream of new legislation has created unforeseen legal obligations in unfriendly jurisdictions, particularly in the areas of privacy and domain name infringement.

In addition to the specter of lawsuits, the enforcement of governmental regulations creates further concerns. For example, the Federal Trade Commission has been aggressively assessing fines and penalties for violations of consumers’ privacy rights, as well as for misleading or inaccurate advertising, particularly online.

There are several best practices that business can follow to protect intellectual property of their companies and the rights of others:

  • Developing, understanding and enforcing online and traditional privacy policies will help companies avoid costly litigation actions.
  • Utilizing authentication and firewall systems assist companies in their effort to achieve digital security.
  • Disclaimers, notices and an evaluation of Web content will help companies avoid reputation injury claims against them.

The threat of an intellectual property, privacy or communications lawsuit is commanding the attention of companies today. While the Internet and other electronic media have opened up exciting avenues of doing business, they have also created other areas of risk that didn’t exist years ago. As a result, companies are being forced to establish management practices to protect their assets from intellectual property or privacy lawsuits, with litigation costs averaging $1 million or more.

Next: Understanding Copyright (part 2 of 5)