IP Theft on the Rise
A December 9 AP report tells of a Chicago chemist who pled guilty to charges he stole secret formulae for paints and coatings and other trade secrets from Valspar Corp. over a 6-month period back in 2008-2009. It was estimated in the charges that the information had a $20m value. Just as in the last few trade secrets theft cases that hit the lay press, the chemist was planning on going to work for a competitive firm in China.
Ironically, the annual U.S. – China Joint Commission on Commerce and Trade opened today in D.C. Not so coincidentally, the US International Trade Commission released a 190-page study on the theft of US intellectual property in China.
And, yes, at the same time Kroll has published its annual Global Fraud Report, wherein it states for the first time incidents of intellectual property theft outpaced physical property theft.
The Gestalt of all of this is depressing, but our takeaway in the valuation community is the need to be aware of the risks inherent in a company’s owning and depending upon intellectual property and in doing business where IP has to be or is likely to be shared or exposed to others.