understanding cybercrime: theft of intellectual property - janine hollesen

Follow this event on Twitter: #Cybercrime

THEFT OFINTELLECTUAL

PROPERTY

Janine Hollesen


DIGITAL AGE

Worldwide : 2 billion internet users

Worldwide : 294 billion emails and five billionsms’s daily

South Africa : end of 2011 = 8.5 million

Increase of 25% from 2010

7.9 million South Africans access internet fromcell phones

New technologies : smart phones, tablets,flash drives increases the risk of theft andpiracy

2


INTELLECTUAL PROPERTY

Patents = invention used or applied in trade, industry,agriculture

New product, process, device or improvement

Territorial and registered right

Trade mark = distinguishing goods and services

Territorial and registered right

Designs = appearance i.e. shape, configuration, patternor ornamentation of an article manufactured in anindustrial process

Aesthetic vs Functional designs

Territorial and registered rights

3


INTELLECTUAL PROPERTY

Copyright

Concerned with works as defined in theCopyright Act

No registration in SA

General legal requirements are met i.e.original and in a material form

Protection granted in other territories who aresignatories to the Berne Convention

Literary works – anything that is writtenregardless of the literary quality thereof or themode or form in which it is expressed

4


COPYRIGHT

Musical works – music, excluding any words or actionsintended to be sung, spoken or performed

Artistic work – works of art including drawings,photographs, works of architecture and works ofcraftsmanship

Cinematograph Film – fixation of material / data /signals capable of being seen as a moving picture

Sound recording – fixation of sounds

Computer programme – set of instructions which directsthe operation of a computer

5


TRADE SECRETS / KNOW-HOW

Trade secrets / Know-how

Trade Secret - information which is notgenerally available and which gives the ownera competitive advantage

Know-how = similar to trade secrets

Body of knowledge, the components of whichmay be individually known, but thecompilation has competitive value

6


WHAT CAN BE STOLEN?

Ideas / inventions / creative expressions

Products

Designs

Product specifications

Process information and methodologies

Chemical formula

Manufacturing process

Business method

7


WHAT CAN BE STOLEN?

Supplier lists

Parts specifications

Quality assurance

Testing procedures

Research and development outputs

Product prototypes

Documents setting out business process methodologiesand corporate strategies

Business decision-making

Staff details, including personal information, skill sets andremuneration levels

Company capabilities and weaknesses

8


9


TRADE SECRET / KNOW-HOW

Core business asset = company’scompetitiveness to create market advantage

Must be kept a secret

Steps must be taken to ensure security of theinformation

Information should be marked “confidential”

Confidentiality / NDA agreements

Duration : For as long as secrecy ismaintained

10


MEASURES

11


EXPLOITATION OF STOLEN IP?

Manufacturing the same product (only if nostatutory IP protection)

Selling the IP - depend on whether the IP canbe commercially exploited

Manufacturing a similar product utilising theunderlying concept without the delay and R&Dcosts

Pre-empting a marketing initiative of a rival

Marketing of a product with the same trademark prior to the launch of the rival’s product

12


EFFECT OF THEFT AND USE OF IP

Erosion of competitive advantage

Loss of sales

Reputational damage

Reduction in potential investment

13


EXAMPLES

Former employee was convicted of exportingsensitive military technology to China

Thousands of electronic files were stolen fromemployer which detailed the performance anddesign of guidance systems for missiles, rockets,target locators and unmanned aerial vehicles.

The US spends billions of dollars annually on R&Dwhich if used by a third party could result in rapiddevelopment of rival products without thesignificant cost

Significant penalties and fines in the US

SA – damages to be proved

14


EXAMPLES

Pittsburgh Corning Corp : two people charged withtrying to purchase trade secrets for $100,000 toopen rival plant in China

DuPont, US chemical company : 2 formeremployees and a third party conspired to stealtrade secrets about a technology for Panang Group(one of China’s largest titanium pigmentproducers)

DuPont has also filed a civil case

DuPont : South Korea’s Industries hired ex-employees of DuPont to steal confidentialinformation regarding a particular product. DuPontwas awarded $1 billion in damages

15


CONCLUDING REMARKS

The pervasiveness of digital platforms

Increase in internet users

Introduction of new technologies

The speed with which information can be exchanged

Contributory factors to assist in the age old crime ofstealing, with the utilisation of sophisticated methods

16


THANK YOU

Janine Hollesen

11 October 2012

Nothing in this presentation should be construed as formallegal advice from any lawyer or this firm. Readers are

advised to consult professional legal advisors for guidance

on legislation which may affect their businesses.

© 2012 Werksmans Incorporated trading as WerksmansAttorneys. All rights reserved.

understanding cybercrime: theft of intellectual property - janine hollesen

News & Politics