Getting intellectual
At their workshop today, Miller Insurance Services Limited (Miller) focused on the growing issues surrounding the protection of Intellectual Property (IP). The value of intangible assets in the UK is now greater than that of traditional physical assets, so the management of these risks is becoming more important than ever for risk managers.
“Many companies think that IP is only a concern if you are in a high tech industry” commented Greg Collins, Director of Professional Risks, who was leading the workshop. “The truth is that intangible assets now account for around 75% of a company’s value, simply put, we are a far more knowledge-based economy than ever before.”
“IP covers designs, trademarks, copyright, patents and trade secrets. Risk managers need to consider three basic elements; controlling your own IP, ensuring that you do not infringe on the rights of others and controlling contractual exposures. Historically many companies have left their IP strategy and decisions to the legal team. However, as the value to businesses increases, so a more holistic approach is required with a combination of skills from risk management, the head of legal, the CEO and other parts of the business.
“As supply chains have got longer and more goods are provided by third parties so effective management of relationships with suppliers and manufacturers need careful consideration. For example, with manufacturing going offshore to countries like China, there is a need to control and limit the risk of ‘Sunday products’ - where additional product is made after the shift, or on a night shift – which are then sold through unofficial outlets. The effective management of these contractual agreements plays a key role.
“During a merger or acquisition the management and protection of IP, both from the perspective of the buyer and seller, is crucially important. As a seller if you make claims based on your ownership rights, you need to be sure that everything is in order to avoid any future challenges. Owning IP alone is not where the value lies – it is in protection of your rights through enforcement.
“IP is clearly maturing fast in terms of value and importance, however it is often overlooked as it can be a complex area and requires specialist advice. Nevertheless, we do not expect it will be long before it will be as natural for clients, brokers and insurers to discuss a patent strategy as projected turnover or property portfolios.”
The AIRMIC annual conference takes place at the Edinburgh Conference Centre June 17-18. The association represents nearly 1,000 risk managers and corporate insurance buyers, including approximately 75% of FTSE 100 companies.
For more information about Miller please contact: Caroline Wagstaff Tel: +44 (0)20 7407 5445 Email: caroline@lucid-communication.com or Hina Gandhi Tel: +44 (0)20 7031 2996 Email: hina.gandhi@miller-insurance.com