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Intellectual Property Infringement |
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Written by Eugene Rosenberg
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A Human Resource Hazard
While traditional human resource doctrine holds sacrosanct the axiom that a company's strength lies in its people, in the modern corporate climate this is simply no longer the case. In this era of dwindling corporate tenures and rapidly growing start-up ventures, intellectual property has emerged as the most valuable currency traded in the global marketplace. While personnel come and go with the changing weather, fiercely protected intellectual property remains the backbone of the corporate beast, ensuring continual returns and growth for firms who keep it safe.
Across the economy, in sectors as diverse as Information Technology and Pharmaceuticals, the largest percentage of many corporate budgets is designated for research and development, aimed at discovering and refining the next great idea. And it has fallen on human resource departments to act as a significant line of defense in protecting these ideas and their designers from falling into the wrong hands. Indeed, the cost of one critical employee's defection to a competitor or the loss of an essential research project can render years of effort and investment wasted.
Non-Disclosure Agreements: Effective Enough?
As should be familiar to all human resource professionals, non-disclosure agreements stand as the principle instrument in protecting a firm's ownership of all research and development performed on its premises. Ideally, these lengthy legal documents stipulate that all intellectual or physical creations produced while in the company's employ are retained by the organization. At the very least, these documents should detail both the corporation's legal domain and the employees' rights therein. However, the lax enforcement of the laws behind such briefs leaves considerable opportunity for gray areas, broken contracts, and employees disappearing with their company's valuable information and resources without the threat of final repercussions or punitive penalties. Additionally, it can be still more profitable for corrupted employees to remain in their positions and continually abscond with confidential research, sell sensitive information, or employ their firm's technical facilities for their own personal gain. In extreme cases of such disloyalty, opportunities to damage a company's reputation and bottom line are virtually limitless.
Clearly Defined Policies (And Penalties!)
As external policies and penalties for IP infringement remain ill-defined and rarely enforced, it becomes incumbent upon HR departments to set strict guidelines for all employees to follow concerning the development of patented materials and the use of company property. Moving beyond the sweeping legal statements in non-disclosure agreements requires administrators to detail codes of conduct in clear, unmistakable language and ensure understanding across the entire workforce. While few employees will refer back to their contracts and other corporate documents when using the copy machine, memory devices, or downloading materials from the Internet, a well-written set of instructions defining acceptable and unacceptable activities concerning company ownership will go a long way in educating and inspiring a climate of respect for intellectual property rights. Such guidelines should include descriptions of company policy with regard to improper use of IP, examples of punishable behavior, and expectations of employee honesty. To increase the effectiveness of IPR policy, place such guidelines in highly visible and sensitive locations around the office where infractions are likely to take place. With bright messages attached to ISB ports and eye catching warnings above the copy machine, employees will have little excuse for ignorance regarding the guiding principles of the firm. Hopefully, such reminders will catalyze an air of respect around the office and peace of mind in the boardroom.
Save Now, Pay Later
HR departments should pay particular attention to the licensing and proper use of all materials used by employees and the regulations regarding their dissemination and replication. Regardless of the infraction, be it merely photocopying copyrighted material for personal reference or indiscriminate distribution of company developed technology, such activities can never be tolerated and strict internal penalties should be in place to avoid embarrassment and the loss of cooperative business partnerships. A recent disclosure by Lenovo, admitting that a majority of their notebook computers in China were loaded with unlicensed Windows, placed the company in a very awkward position in the media and seriously damaged confidence with their software partners. Given the current climate in China, this admission was hardly shocking and was seen as a step in the right direction. It none the less cost the company considerable face on the world stage and forced Lenovo under the microscope for all its future international ventures. Had Lenovo implemented an internal policy of defending Microsoft's intellectual property, they could have resolved this infringement within the company and avoided global embarrassment and suspicion.
Damage Control
Ultimately, nearly every major multinational and domestic firm in China will be faced with an incident of IPR abuse in its offices. How individual professionals and human resource departments handle such situations can prove the difference between a quiet mistake handled internally and a scandal with external consequences affecting the company's bottom line. When an IP infraction is detected or reported, a well-defined procedure should already be in place for the HR department to follow to minimize the impact and speed resolution for the company. This is perhaps the most crucial responsibility for HR professionals in terms of protecting their firm's rights and that of their clients and business partners.
When drafting response procedures for infractions of intellectual property theft, corporate guidelines should roughly parallel those dealing with standard property theft. This will not only simplify policy, but will act as a deterrent by making clear that unauthorized use of intellectual property is tantamount to stealing directly from the company. While many employees would never dream of stealing valuable equipment, they many consider the unlicensed use of corporate IP a harmless activity. By treating incidents of IP theft with the same severity as those of physical larceny, the illegality of such activities will be thrown into sharp relief and leave no gray areas in defining the company's rights. On the positive side, rewarding whistleblowers who observe IPR abuses with the same consideration as those who identify and document robbery and other illicit behaviors will enhance morale and encourage an environment where corporate interests are protected with employees' personal attention. Again, Human Resources must be instrumental in instill such policies.
While the importance of intellectual property rights grows in stature as their protection remains minimal on the Chinese mainland, there is considerable cause for optimism. The government has recent drafted additional legislation to defend IPR and a newly established court system will be dealing specifically with these issues. Meanwhile on the streets, increased wealth will not only decrease individual corruption, but it will also drive the demand for authenticity, making counterfeiting less and less profitable. Finally, increased cooperation in the private sector will provide greater awareness and understanding of IPR across the country. Still, human resource executives in China must remain vigilant and comprehensive in their protection of their firm's intellectual property. More and more, it represents the lifeblood of their corporations and the fruits of their development. HR professionals must become the constant gardeners, protecting this precious harvest of ideas made real.
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