Protect Your Company from Intellectual Property Risks

In intellectual property management, mistakes can be extremely costly, and are, unfortunately, easy for an IP manager to make. The stakes are high: these could cause your company to lose its intellectual property (IP) rights, or worse, may result in competitors obtaining those rights.

Here are the Top 10 IP management slip-ups that can increase these threats to your company:

  • Failure to capture an invention  With the “America Invents Act,” the United States converted to “first to file” from “first to invent.” Unlike the olden days, the first one toCopyright file a new invention—not the first to invent it—gets the rights to the patent. If one of your inventors has a patentable idea and you don’t find out about it, you risk having a competitor file ahead of you. Your company can also be excluded from using the invention, which may be a major setback.
  • Failure to meet statutory deadlines  Once you begin the patent filing process, you must meet strict statutory deadlines to file abroad and respond to communications from the patent offices. These include conversion to non-provisional status, application filing deadlines and national filing deadlines. Miss these dates and your patent rights disappear.
  • Failure to Stay in the Loop  Are there IP related conversations and actions happening in your company that you are not aware of? While you may be diligently tracking your activities, your inventors, attorneys or outside counsel could be taking actions (or not taking actions) that you need to know about. Things can easily fall through the cracks if you are not tracking them or in the loop. This may result in expensive mistakes and potential loss of patent rights.
  • Failure to Accurately Project Costs  There are costs associated with building an IP portfolio, including outside counsel fees, filing fees and maintenance fees. Your IP program can be adversely affected if you cannot accurately project what these fees will be and budget accordingly.
  • Failure to respond to patent trademark office actions on time  During prosecution, your patent applications will receive communications from patent offices. Either you or your outside counsel must respond to these on time. Failure to take timely actions, can lead to expensive penalties and/or loss of rights.
  • Failure to properly disclose material information  In many countries, including the U.S., you are required to file information disclosure statements that include all relevant prior art. These statements need to be consistent across all of your related patent applications. Failure to make proper disclosures can result in the loss of your patent rights.
  • Failure to maintain your patent  In most countries, you must pay regular maintenance fees for issued patents or annuities for pending applications. If you miss making a payment, are delinquent, or if a payment is not properly processed, you can lose your patent rights or may have to pay significant penalties to restore your rights.
  • Failure to enforce license obligations  If you have licensed patents to others, you need to monitor the agreement and track the royalty payments. Failure to do so can result in significant loss of royalty revenue, and unlicensed use of your IP.
  • Failure to align patent portfolio to business needs  Over time, your patent portfolio will grow. At the same time, your company’s business strategy may change. You need to monitor your portfolio to make sure it is aligned with your business needs. Maintaining a portfolio of low-value patents that doesn’t support your business strategy is a bad investment.
  • Failure to account for your IP portfolio  For companies with SEC reporting obligations, it is mandatory to accurately disclose your patent assets. If you don’t have an accurate picture of your actual portfolio, you will encounter costly and embarrassing legal problems.

As the IP manager, you are responsible for seeing that these failures don’t happen. While this is a challenge, it is one that you can meet by working closely with your inventors and outside counsel. You must also be very careful to track events in an IP calendar.

Smaller Companies More Vulnerable to Employee Theft

It stands to reason that larger organizations would be more at risk of embezzlement by employees, but the reverse has been shown to be the case. Organizations with fewer than 150 employees are particularly at risk, accounting for 82% of all embezzlement cases, HiscoxHiscox2 found in its new report, Embezzlement Study: A report on White Collar Crime in America. Smaller organizations with tight-knit workforces are particularly vulnerable because of the trust and empowerment given to employees.

Incorporating employee theft cases active in the U.S. federal court system in 2015, the study found that 69% represented companies with less than 500 employees. Perpetrators are often “regular people who are smart, well-liked, and those you’d least expect to steal,” according to Hiscox. How does a trusted employee become a criminal? Motivations can range from financial pressure to a belief that they are underpaid by the company.

Employees with more tenure, access and control over finances are found to take the largest amounts. While the type of fraud can vary by industry, what is consistent is access to funds. In fact, managers were found more likely to steal than other employees.

Hiscox3

For the second year in a row, the greatest number of cases, 17%, was in the financial services industry and second was nonprofits at 16%. Labor unions ranked third, followed by real estate/construction. The largest scheme was a $16.7 million loss in Texas; followed by ones in Connecticut at $9 million, Ohio at $8.7 million and Utah at $4 million.

Hiscox4

Schemes include taking cash or bank deposits, forging checks, fraudulent credit card use, fake invoices and false billing of vendors and payroll fraud.

Companies can protect themselves in a number of ways, including putting checks and balances in place, performing background checks on employees who handle money and teaching employees how to detect fraud, according to Hiscox.

Hiscox5

The study findings also include:

Hiscox

Prioritizing Risk Management Strategies in Schools

safety
No matter what precautionary measures schools take, there are many risks and “fires” that need to be put out on a daily basis. To keep staff and students safe and to protect school assets, a proactive approach to mitigating risk in schools is a necessity. The keys to a successful risk management program include careful, strategic planning while taking all relevant and potential factors into consideration, but how can administrators get started?

By identifying potential risks and applying a process to assess them, schools can focus on their objectives more clearly, including top priorities like student and employee wellbeing. Effective risk management reduces the disruption of a student’s education, damage to a school’s reputation, lost time, stress from managing incidents, and the potential risk of legal intervention in an increasingly litigious world. School administrators can explore these strategies as they strive to enhance their risk management initiatives:

Focus on greatest risks and exposures
The concern about lawsuits is ever present, but schools cannot operate under the pretense that litigation is going to happen. They instead must conduct their business for the safety of students and staff. If schools operate under fear, their risk management efforts will simply not be as effective as planned.

Administrators must also consider relevancy. In the private sector, risk management has a large seat at the table, whereas in the public sector that is not always the case. Depending on priorities, some issues that play a vital role within the public sector may not be relevant in the private sector. Identifying the relevance of issues often determines where and how money is spent in a school district, however. District-wide funding can be one of the biggest issues administrators face. Districts encounter daily challenges to come up with the right resources available to train staff—especially when it comes to implementing technology. Administrators must make tough decisions when considering funding realities and the need for as much risk management coverage as possible. They need to maintain a balance when money is at stake, as they are only able to make decisions based on the amount of funds available to them.

Focus on what effective training can offer a school faculty
Safety training for school and district staff should play a huge part in every risk management strategy, as well as ensuring the district is in compliance on a state and federal level. Safety training has a trickle-down effect, and if provided at the appropriate level of training, administrators will see a significant effect in reduction of accidents, damage to buildings and costs overall.

There is always work to be done when it comes to improving school safety and collaboration is a big part of a program’s success. Some of the issues schools now face are different than the concerns of decades past, so providing training and resources to staff can make a difference in helping them understand how to handle a number of situations that could arise.

Technology resources can help with this. Online databases, such as SafeSchools Online Staff Training System, for example, allow school districts to distribute quality training to all employees. This is an effective and way to track and share information on safety and compliance issues that could arise in the classroom or school. The digital database also serves as a proactive approach to training. Having an online database enables staff to train in school or at home, and ensures that everyone has the necessary training to handle a situation before it occurs. In the end, by deploying an online safety training system, the district is saving money and time and will be more proactive in handling issues.

Focus on training early on—and take it seriously
First and foremost is tackling the issue of rallying everyone to take safety and compliance issues seriously. Risk management is not a job for one person. It starts with everyone in the school district, from administrators and the school board to principals, teachers, grounds staff and even students. Everyone needs to think of safety and practice mutual accountability within the school community.

Final Thoughts
Risk management may take a back seat when funding is low, giving the impression that it isn’t important. For the sake of their staff and students, however, district-level administrators need to be on board with risk management and make it a priority. In schools, educating students is the main concern, and risk management is secondary. But just like in a factory where posted signs read “safety first” or “safety is number one,” our goal is to get schools to think of safety and its importance to the school in the same way they think of education.

June Commercial Insurance Rates Up 1%

The composite rate for commercial insurance placed in the United States rose to minus 1% in June from minus 2% in May, according to MarketScout. One of the most significant changes was rates for transportation accounts, which moved from minus 2% to plus 1%. Rates for every industry class, except habitation and transportation, moderated by 1%. Habitational rates were unchanged at minus 2%.
Industry class chart-1

Industry class list

“Insurers are getting tired of cutting rates,” said Richard Kerr, chief executive officer of MarketScout. “There are still pockets of very competitive business; however, it is beginning to look like insurers are willing to maintain the rate reductions of the past few years and not cut rates even further.”

Coverage classifications business owners policies (BOP), umbrella and professional liability all moderated by 1%, compared to the prior month. EPLI rates were up 1% and commercial auto rates moved from flat to plus 2%.
coverage class list
By account size, medium ($25,001 to $250,000) and large ($250,001 to $1,000,000) accounts moderated to minus 1% and 2% respectively. Rates remained the same for all other account sizes.

Account size