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Follow this event on Twitter: #Cybercrime
THEFT OFINTELLECTUAL
PROPERTY
Janine Hollesen
Follow this event on Twitter: #Cybercrime
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
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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
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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
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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
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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
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WHAT CAN BE STOLEN?
Ideas / inventions / creative expressions
Products
Designs
Product specifications
Process information and methodologies
Chemical formula
Manufacturing process
Business method
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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
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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
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MEASURES
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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
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EFFECT OF THEFT AND USE OF IP
Erosion of competitive advantage
Loss of sales
Reputational damage
Reduction in potential investment
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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
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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
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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
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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.