Sunday, October 2, 2011




Two articles on the same day in the AdvisenFPN bulletin addressed the issue of "intellectual-property."

The first, headlined DuPont Wins Nearly $1 Billion In Secrets Case reports that a court awarded DuPont US$919.9 million in damages for a Korean company's alleged theft of secrets regarding the manufacture of Kevlar body armor.

The second, with the head SAP will pay fine of $20 million in Oracle copyright case, details how Germany's SAP AG agreed to pay a criminal penalty of US$20 million for stealing secrets from Oracle. Oracle still has a civil suit against SAP and is seeking additional financial penalties against the Germans.

For a risk management practitioner, these stories raise a two-sided concern.

Side One: Don't be a victim.

    In the DuPont Kevlar case, DuPont claims the Korean company, Kolon, acquired its trade secrets by hiring and attempting to hire former DuPont employees. There was no mention in the article, originally in the Wall Street Journal, of any Non-Disclosure Agreements (NDAs) or indication that DuPont was suing any former employees.

    Kolon has filed an anti-trust suit against DuPont; the article did not provide specifics.

    In the Oracle secrets case, reported in the San Jose Mercury News, SAP admitted its personnel "accessed Oracle's computers without permission and made thousands of unauthorized copies of Oracle's software."

Side Two: Don't spy on the competition.

    It's tempting to try and gain an advantage through someone else's effort, as SAP admitted to doing, but it's expensive.

    Being able to define what is a "kosher" way to acquire information about a rival and its products - and in the case of international organizations and patients, this can include a number of laws, some of which may be in conflict with others - is what keeps patient lawyers in business.

    Even if the defendant - your company - prevails, the company bottom line takes a hit with lawyers and expert witness fees.

Industrial espionage is big business and it is a specialty business.

The risk management practitioner needs to know the risks are there and the practitioner needs to make the risks known to management.

Most risk management practitioners that I know are notindustrial espionage experts - nor are they financial gurus or HR mavens or ... They ARE risk management Subject Matter Experts - people who know to whom to turn for expert advice.

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