IP Theft on the Rise! Have You Protected Your Business’s Intellectual Property?

Aug 2018

Intellectual property (IP) is the heart of the 21st-century company, an essential motor driving innovation, competitiveness, and the growth of businesses and the economy as a whole. According to the recent research done by Ocean Tomo, intangible assets value grew to an average of 84% by January 1, 2015.[1] In the Digital Age, IP theft is set to rise within the coming years and could potentially affect thousands of companies and startups, especially in the IT industry. The Internet has definitely made theft easier than ever before.

IP theft is a business leader’s nightmare – it may mean forfeiture of the first-to-market advantage, loss of profitability, or—in the worst case—losing entire lines of business to competitors or counterfeiters. Therefore, whether you are a startup or an established company, it is never too early to build protective walls around your IP. Do not wait until it is too late!

What Kind of Intellectual Property Does my Business Own?

Intellectual property (IP) refers to creations of the mind. We are surrounded by and constantly interact with someone’s intellectual property. For example, while reading this blog post, you will come across photographs protected by copyright, you are sitting in front of your computer which bears a brand name protected by a trademark (for example, Lenovo), you are probably sitting on a chair possibly protected by design rights and you might be holding a pen whose mechanism has been patented at some point.

There is a general consensus as to what makes the core of IP content, such as literary, dramatic, musical and artistic works, recordings, films and broadcasting, inventions, registered and unregistered designs, signs, names and images capable of distinguishing the goods or services. [2] Therefore, anything you have created, from an idea how to develop your business to the logo or computer code, may represent your intellectual property.

If you are an IT company, a piece of software you developed is protected by your copyright.

Intellectual Property is protected by IP law such as copyright, patents, designs, trademarks, geographical indications and trade secrets. [3] They give the creator the right to exploit this property and prevent others from making unauthorized use of their IP for a limited period of time. However, there is no general consensus as to the limits of Intellectual Property Law. [4] In this brief overview, we will focus only on most common types of IP rights in our daily practice: trademarks, copyright, patents and trade secrets. If you wish to find out more about industrial design, you can take a look at our blog covering that topic.

Why Do I Need to Protect My Intellectual Property?

Your creations are vital for the growth of your business. As an IP owner you should benefit from your hard work, investment in the creation and success. This means that you can decide if and how your property can be used. In fact, IP rights provide you with a mechanism for earning financial benefit for their use by others. If your intellectual creation is stolen, your competitors may reap without sowing, unfairly diminishing your competitive advantage and damaging your business. Thus, with the growing use of the internet, it has never been so easy to access information and the chances of an idea being copied have never been greater. Therefore, protecting your IP became more important than ever before.

Who Can Steal My Business’s IP?

We often see theft of IP by rogue current or former employees. Theft can have various forms from taking certain sequences of software to stealing a part of company’s business name (especially if the company has previously failed to register trademark). It is very common to see the unlawful use of confidential information for the purposes of establishing a competitor business to its former employer, which tends to be detrimental in the absence of properly drafted Non-disclosure agreement (NDA).

In the case of IT companies, apart from employees, theft is commonly performed by entrepreneurs who offer software development services to the IT company.

Nevertheless, it is not unusual to see both competitors, and criminal and recreational hackers, as IP thieves as well.

How Do I Protect My Business’s IP?

Some IP rights are automatically safeguarded by IP law (such as copyright), while others require some form of legal action (trademarks, patents). Nevertheless, when it comes to confidential information, you need to make sure you have proper internal confidentiality procedures in force.

So what can you do?

While we explain further what should be done in relation to certain types of IP, it is paramount to understand the following:

1. Be careful of third party assistance!

If you’ve hired a person or company to create your IP and/or products, it is vital you have a detailed and protective agreement in place. This should assign full ownership rights to you upon payment or completion, as these do not automatically transfer to you. Such agreements are especially important in the IT sector.

2. Carefully draft Employment Contracts

If your own employees create the IP during their employment, you need to ensure that IP stays in your company in any scenario.

3. IP License Agreement

In case you would like to provide permission to use your IP to another party, be careful with the IP license agreement to be able to maximise your profit and retain control over it.


Trade Secrets

The most jeopardized IP today is actually trade or corporate secret, rather than IP already in public domain (such as trademarks and patents). Why? Well, because it can be monetized quickly. Thus, unlike in other types of cyber crimes such as the theft of credit card or personal data, it may take considerable time to be discovered.

Copyrighted data, such as software code is one of the most popular targets. Among other popular targets are also business strategies, customer lists, merger plans, manufacturing processes and etc.

So, how do you protect your business from misappropriation of trade secrets?

These are the ways:

Introduce confidentiality and security procedures (this should be set out in a separate and detailed Rulebook).

Sign carefully drafted Non-disclosure agreements with employees, subcontractors and business partners.

Collect evidence of confidentiality procedures and possible misappropriation.

Conclude properly drafted contracts with non-compete clauses.

Our attorneys can help formulate policies and procedures to help protect your critical know-how. By implementing procedural and physical safeguards, NDA execution and auditing, and robust enforcement practices, it is possible to achieve protection for your trade secrets.


A trademark or service mark is a brand name which is registered. Therefore, even if you own web domain or register a company under the certain business name, you are not fully protected. If someone decides to register, for example, the same word or logo, they could force you to re-brand the entire business.

A trademark may include any word, name, symbol, design, or any combination used to identify and distinguish the goods or services of one seller or provider from the others. The main function of a trademark is to indicate the source of the goods or services, to prevent customers from being misled or deceived. For many businesses, the brand value may far exceed the worth of the company’s tangible assets. Therefore, no wonder why Don Keough, chief operating officer and a director of The Coca-Cola Company from 1981 to 1993, has said: “I define my role as president of The Coca-Cola Company very simply: It is to protect and enhance the trademarks of the company.”

In order to be eligible for protection, a mark must be distinctive of the proprietor so as to identify the proprietor’s goods or services. To obtain trademark or service mark protection you need to file an application for trademark registration either nationally, regionally (European Community) or internationally. In Serbia, trademark applications are to be sent to The Intellectual Property Office in Belgrade. The application needs to precisely specify goods and/or services for which the trademark is to be registered. Before sending the application, it is absolutely vital to undertake an analysis of the registered mark database to avoid the application being refused or to reduce the risk of the potential trademark infringement, which may have very costly consequences. A person without the proper background in IP law may not perform this analysis properly.


An idea, no matter how original, will not be protected until it is expressed in some way. Also, it is very important that international IP law expressly prohibits the introduction of formalities for the protection of copyright, meaning that, unlike in the case of trademarks and patents, creators enjoy protection without the need for registration of their works. The intangible property protected by copyright law is distinctive in that it arises automatically.

Since Serbia has signed and ratified the most important conventions on copyright – Berne Convention for the Protection of Literary and Artistic Works and Trade-Related Aspects of Intellectual Property Rights (TRIPS), international IP law principles apply in its national law.

As a copyright owner, you have two types of rights – economic and moral rights. The economic rights are property rights which are limited in time and which may be transferred by the author to other people in the same way as any other property. They usually include the right of reproduction, the right of distribution, the right to make it available to the public, rental and landing rights, as well as the right to make an adaptation of the work. On the other hand, moral rights are rights of creators of copyrighted works, such as the right of attribution, the right to have a work published anonymously or pseudonymously and the right to the integrity of the work. If your copyright has been infringed, you may protect it in copyright litigation.


Inventions, whether products or processes, which are new, involve an inventive step and are capable of industrial application, may be protected by patent. A patent confers an exclusive right granted by a state to an inventor for a certain period of time in return for disclosure of his or her invention in a document known as the patent specification. The description of the invention in the patent specification must be clear and understandable enough, so that other skilled persons in that area of technology may perform the invention after the patent expires. The extent of the exclusive rights is defined in the part of the patent application known as the claims. Unlike copyright, which arises automatically on creation of the work, patents are only granted after the applicant complies with a relatively onerous process. In Serbia, to obtain patent protection one needs to file an application to the Intellectual Property Office in Belgrade.

Under the Serbian law, inventions may be protected by patent, which lasts for 20 years from the date of filing the application, or petty patent, which lasts for 10 years from the filing date of application. The main difference between these two types is in the subject matter: petty patent protects only a solution related to the structure of a product or the layout of its components, while a patent protects the product or a process, or their use. Before filing an application for patent or petty patent it is critical to check if your invention has already been protected and find information about the inventions belonging to the same field. This analysis may not be undertaken by a person without a strong background in the Intellectual Property Law.

[1] Available at: http://www.oceantomo.com/2015/03/04/2015-intangible-asset-market-value-study/
[2] According to Art. 2, para viii, WIPO Convention (1967) „Intellectual Property“ includes „the rights relating to – literary, artistic and scientific works – performances and performing artists, photographs and broadcasts – inventions in all field of human endeavor – scientific discoveries – industrial designs – trademarks, service marks, and commercial names and designations – protection against unfair competition and all other rights resulting from intellectual activity in industrial, scientific, literary and artistic fields.“
[3] In common law countries passing off is also considered to be a part of IP law, while civil law countries protect unregistered trademark rights via the laws on unfair competition.
[4] The Supreme Court of the UK in Phillips v. Mulcaire (2012) UKSC 28.

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