Intellectual property in the digital space: the importance of protecting and enhancing it

A company’s success is based on its assets, its ideas, its know-how, but also, and above all, on the way it operates and executes its strategy. In this mad race, if it wants to be one step ahead, it is important that it differentiates itself and stands out from its competitors. We have a tendency, we in France, to hide our face and hide reality. Awareness of the challenge of protecting intellectual property is necessary, especially in an increasingly digital world where theft and plagiarism are easy and common practice, especially for small structures that are less protected and aware of these risks. , the issue of intellectual property protection is neither obvious nor a priority in France, in the Anglo-Saxon world it is quite different. Among the latter, the first reflex is to protect and improve the intellectual heritage of their organizations due to the current practice of what is called over there “competitive intelligence”. Why protect your intellectual property? Here are some answers.

Start-ups and SMEs: Be inspired by the greats

American and English companies, regardless of their size, have shown in their risk management the importance of protecting all data, including intellectual data. It is common for companies to recycle their competitors’ ideas or techniques, sometimes improving them, appropriating them outright to diversify or boost their operations.

Let’s take an example worthy of a textbook case: Instagram, a social network based on sharing and highlighting photos, which is part of the Meta group, has relaunched its activity many times by taking inspiration from the innovative and trendy elements with its competitors. First the system of stories and filters that are very similar to the snaps and filters of the Snap network (formerly Snapchat), then more recently the wheels that were put in place quickly after Tiktok’s dazzling success during the confinement of 2020.

Start-ups such as young companies, whose main activity is based on an innovative idea or technology, very often digital, naturally tend to consider the protection of their intellectual heritage, and this in a digital way. Nevertheless, the question arises too little within French SMEs, claiming that they neither have the budget nor even the size of an American social network. However, all knowledge, know-how, innovation and associated information must be protected, because the competition lies in ambush.

Analysis and protection of investment sources

It is common to say that “10% of a company’s IT budget must be mobilized for its security”. However, this standard is only too little implemented in small and medium-sized organizations.

However, the protection of a company’s activity should not be limited to insurance and/or simple antivirus software. An analysis of the risks incurred is necessary to determine the viability of its organization, but also to know the elements and perimeters that must be protected. This analysis, then the implementation of security processes or policies, can also be a differentiating factor in obtaining support from investors, e.g. in the case of fundraising.

The National Institute of Industrial Property (INPI), which is responsible for preserving and protecting all intellectual property deposited with it, such as ideas, patents or trademarks, can also play a crucial role in this overall approach.

Finally, although there are possible legal remedies during the theft of intellectual property, the costs in terms of time, human resources and money can be very high and can affect the company’s activity throughout the procedure. It is therefore often more appropriate to invest in a turnkey protection solution using techniques such as obfuscation (obfuscation in French) of code and data, among others.

Improve and protect its assets to attract investors

Protection of its intellectual property rights and its industrial secrets has now become a necessity, especially in the search for financial means, to attract and retain potential investors or buyers, also Anglo-Saxons.

From now on, in order to obtain an investment, the latter looks not only at the profitability of a company and the fact that it has recurring income, but also, more and more, the consideration of the effort to protect the intellectual property right. because it is also their own investment that it ultimately values ​​and protects.

In recent years, FDI (Foreign Direct Investment) into France has been increasing and will continue to grow, with the recent support from the government and the recent holding of the Choose France summit. It’s time to get up to speed and adapt to the investment theses of various funds to scale up.

This protection is all the more necessary in case of a desire to internationalize the company for the reasons mentioned above: Industrial espionage and data theft, even technical, are common practices among some of our neighbors.

Another textbook case, in the case of merger-acquisitions, Yahoo! in 2016 is the perfect example of the loss of value, after a cyber attack and data theft, of a company. In the process of being acquired by Verizon, a leak in the press announces that three billion user accounts from Yahoo! has leaked. The case took on such proportions that the takeover was undermined. Conclusion: several fixes later, the number of hacked accounts is greatly reduced, but the valuation of Yahoo! also, to drive down the price of its acquisition of Verizon. We’re talking several hundred million dollars here.

The protection of intellectual property and related data has several purposes: to protect a company and its revenue, optimize its activity, improve its assets and reassure investors. Protecting your know-how from leaks saves time and money, so why do without it?

Taking this practice into account is already firmly rooted upstream in the minds of companies in Anglo-Saxon countries. In this area, unfortunately, we have a real delay in France, and it often costs our companies too much afterwards.

Especially since in an increasingly digital world, and where hackers indiscriminately target all companies with increasingly effective means, protecting and enhancing organizations’ intellectual heritage must be a priority.

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