26 Intellectual Property Experts & Business Leaders Reveal the Biggest Misconceptions Companies Have About Insider IP Theft

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Brand protection is a high priority for companies. If your brand’s reputation is tarnished, sales may drop due to the brand’s poor image. Why Is Brand Protection Important? Brand protection is important because it allows a company to protect its image by removing copycats from the marketplace, which possibly tarnishes the reputation of its products or services. Brand protection encompasses a series of actions taken by a right holder to prevent the intellectual property associated with their brand from being abused by third parties. The perpetrators are typically bad actors like counterfeiters and copycats who illegally infringe on a brand name, brand identity, and intellectual property for personal and financial gain. These are the core elements that constitute a brand and brand protection: Intellectual Property (IP): Brands use all manner of IP to safeguard assets associated with the brands. These typically include patents, copyrights, trademarks, and so on. According to the 2017 report by The Commission on the Theft of American Intellectual Property, US businesses lose approximately $600 billion through various manner of intellectual property theft such as pirated software, counterfeited goods, and stolen trade secrets. Reputation: A brand is coveted because it represents how the general public perceives a company, the quality of its products, its values, and its standing in the community. As a result, companies work hard to build, preserve, protect and embellish their brand reputation. The Benefits of Brand Protection Brand protection provides many direct benefits and ancillary benefits. Improved Sales and Revenue Businesses can generate more sales and boost their revenue without scammers, forgers, and counterfeit products eating into sales and financial opportunities. Increased Profit Margins Automated brand protection strategically puts mechanisms and systems in place to detect, monitor, and forestall attempts at copyright infringement. Since low-quality products have been removed or prevented from proliferation, customers would be more likely to spend on reliable, high-quality products. This saves businesses valuable time and frees up valuable energy and money in the form of profit that would have otherwise been chipped away by fighting the illegal shenanigans of unscrupulous actors. Improved Reputation and Partnerships When a business and its products are no longer associated with mediocrity due to fake goods, it generates goodwill among the public. Furthermore, this leads to an improved reputation, creating more customer loyalty. As a result, retailers, vendors, distributors, and other partners will be more likely to engage in partnerships with the business and its associated brands. The Threats To Brand Reputation And Image Threats to brand reputation come in various forms and are manifested in intellectual property theft, copyright infringement, and all many other nefarious counterfeitings. Copyright Piracy: This encompasses the infringement of copyrighted work through unauthorized activity such as copying, display, performance, and/or illegal distribution. Counterfeiting: Counterfeiting encompasses broad-based illegal activities that typically involve some of the following:Illegal labeling and violations of trademarks, patents, copyrights, and design rights to deceive consumers that the product or business is affiliated with the legitimate brand.Unauthorized manufacture and distribution of illicit goods under another person’s or brand’s name without permission. Patent Theft: Infringing on patent rights by using a patented product without permission or license. Grey Market or Parallel Market: This is the sale of legitimate goods without the trademark owner’s consent in a certain market or economic area. The goods are effectively diverted outside the official distribution channels without the trademark holder’s approval. Trademark Abuse: This includes brand impersonation schemes. Brandjacking: This is the unauthorized use of a company’s brand, often through online impersonation that assumes the brand’s identity. In our increasingly digital-inhabited society, social media impersonation is becoming more rampant. Brandjacking skirts the line of criminality, but it is an underhanded method that usually involves leveraging another business’s brand for one’s own marketing purposes. Brand Impersonation: As the name implies, brand impersonation occurs when unscrupulous parties impersonate a valued brand with the objective of tricking unsuspecting victims into fraudulent business transactions. Trademark Squatting: This happens when someone other than the valid brand owner registers a trademark. Threat Intelligence Steps to Establish Brand Protection Companies usually follow the process below as a course of action to pursue effective brand protection. Detection Organizations must be vigilant by continuously monitoring their online properties and investigating any possible abuse or infringement of their brand’s position. This involves discovering rogue websites, fake social media profiles, and counterfeit e-commerce listings. Implementing security software for anti-phishing to prevent impersonations that are often a precursor to brand infringements. In addition to scouting the internet for online infringement, they must investigate attempts to perpetrate IP violations in brick-and-mortar establishments. In essence, this phase of brand protection involves detecting risks early and alerting the relevant authorities when violations occur. Most often than not, the threat intelligence used here typically involves various aspects of cybersecurity defenses and monitoring. Validation This process involves verifying and confirming that the IP and copyright abuses identified are valid. This is important because while an organization vigorously enforces IP rights, it should ensure compliant companies aren’t penalized or subjected to undue burdens. Proactive cybersecurity measures are instituted to validate, anticipate, and prevent potential brand infringement threats. Enforcement Brand protection involves compelling compliance, so organizations have a role in ensuring laws and obligations are adequately followed in protecting their IP. This may include working with the relevant authorities to close illicit product listings, shut down rogue websites, remove misleading online postings, and take down fake social media accounts. Reporting Organizations need to have an inventory of the status of their intellectual property and the scope of violations, along with actionable information to improve their brand protection and security posture. How Do Data Breaches Affect Brand Protection? Data breaches inflict incalculable damage to business brands. According to IBM’s 2022 Cost of Data Breach Report, a data breach’s average cost has skyrocketed to $4.24 million. While financial estimates are easier to pin down, other debilitating impacts are more difficult to quantify, such as reputational damage and the destruction of customer trust and goodwill. Reputational Damage Brands are based on reputation generated by sustained goodwill — or lack thereof — with the general public. As a result, brands are understandably sensitive to anything that erodes their hard-earned reputation. Unfortunately, reputational damage resulting from cybersecurity breaches is not an isolated affair since as much as 46% of organizations have been impacted. A data breach can cause a serious dent in a brand image that is very hard to recover from, especially for smaller businesses that don’t have the marketing or PR power to counter negative publicity. Data Breach Damages Consumer Trust One of the worst things IP assaults on brands do, whether through counterfeit products or data breaches, is massively undermining the trust and goodwill of the brand. While brands jealously guard their reputation, data breaches are more insidious because, in addition to financial damage, they often result in broken customer trust, which is difficult to repair. This damage is worsened by the fact that negative customer sentiments can quickly spread through online reviews and social media. Data breaches signal to the public that the affected organization cannot be trusted as a custodian of customer data, including personally identifiable. Worse, it may build a narrative, whether justifiable or not, that the organization is careless or doesn’t take security seriously. Loss of Competitive Advantage A successful brand gives the business a competitive advantage that competitors in the same market or industry cannot easily replicate. This is because, in addition to its distinct features, the intangible value, benefits, and emotional bond a brand forges with customers make it challenging for competitors to copy willy-nilly. However, a data breach undermines a brand’s wholesome image and, in turn, can weaken its competitive advantage.

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29 Intellectual Property Experts & NFT Experts Reveal What Businesses Should Know about NFTs and IP Protection Non-fungible tokens (NFTs) have taken the digital world by storm, and interest in NFTs remains high, especially among digital-native generations. There's also an emerging interest in NFTs by businesses for their monetization potential and immutable transaction records. We've created this collection of expert tips to provide insight into what you should know about NFTs and intellectual property protection, such as: The transfer of NFT ownership does not confer ownership of the underlying asset. Those who are not well-informed may inadvertently infringe on the owner's IP rights. NFTs have already resulted in lawsuits for IP theft, trademark infringement and dilution. As the market is immature, it's not regulated, and there's minimal case law that can be used to navigate the legal waters. Copycats are a common problem in the NFT space. Robust cybersecurity is a must for businesses minting their own NFTs to safeguard their intellectual property. ...and more. But this merely scratches the surface of the ins and outs of NFTs and how they can protect or otherwise impact intellectual property rights. To provide more insight into what you should know about NFTs and IP protection to keep your business on solid financial and legal footing, we reached out to a panel of intellectual property experts, NFT experts, and business leaders and asked them to answer this question: "What should businesses know about NFTs and IP protection?" Meet Our Panel of NFT Experts & Intellectual Property Experts: Eloisa Marchesoni William Scott Goldman Terrance Blau Laura J. Winston Dominic Harper Alex Wang Raj Kallem Kyle Hill Maxim Manturov Eric Florence Radiance W. Harris, Esq. Joris Delanoue Craig Smith Jared Stern Bob Secord Maria Rebelo Mateo Silva Chris Olson Jack G Abid Volodymyr Shchegel Yanush Zaksheuski Mike Pedrick Rylee Armond Pedro Atencio Rexor Allen Vishesh Raisinghani Chris Seline Lew Zaretzki Guy President Keep reading to learn what your business should keep in mind regarding NFTs and IP protection. Eloisa Marchesoni Eloisa Marchesoni is a tokenomics expert and angel investor. "While it may be that the disputed NFTs discussed on the web experience drastic fluctuations in value due to..." Market volatility and, in some cases, negative publicity and uncertainty over the various exploits that have targeted the owners, as well as OpenSea and similar platforms, it is highly improbable for these cases to trigger a collapse of the general NFT market. A simple reason for this is that more and more big-name brands are taking their first steps into the NFT realm: Taco Bell, Coca Cola, and Nike are just a few. For these companies, the risk of their NFTs becoming the subjects of legal action is extremely low to zero because they own all the IP rights related to the underlying works. In a nutshell, a business minting NFTs based on proprietary IP will never incur such problems. The same cannot be said for freelance creators. In fact, on January 14, 2022, luxury design house Hermès filed a lawsuit against Mason Rothschild with the Southern District Court of New York, citing multiple causes, including trademark infringement and dilution. Mason Rothschild is a digital artist who has created METABIRKINS NFTs featuring the Hermès BIRKIN handbag design, and he is now accused of IP infringement. The case is still ongoing. The novelty of the NFT marketplace means that IP case law has yet to account fully for these assets. If an individual creator wishes to mint their own NFTs but is unsure of the legal repercussions, it's good to err on the side of originality or seek specialist advice. William Scott Goldman @GoldmanLawGroup William is a Senior IP counsel at Goldman Law Group, acquiring first-hand experience in the entertainment industry, business, and branding as the founder of several successful startups. He advises creative business clients, both established and early-stage, graphic designers, advertising agencies, and other attorneys/law firms. "From a legal perspective, under U.S. law, copyright exists in the underlying work if..." It's considered original and fixed in a tangible medium of expression.For instance, paint arranged on canvas could be considered a copyrightable work. However, minting the same as an NFT simply encodes the data on the blockchain as an electronic certificate of authenticity and automatic, smart contract. In fact, on most platforms, the purchaser can only sell or transfer the NFT to others while the author reserves all rights in the underlying work, including reproduction rights, public display rights, distribution rights, and rights to derivative works. Of course, this creates a host of new legal issues. Courts are now retroactively attempting to fit this technology within the framework of existing IP case law. Specific legislation will also likely be introduced, as we've seen in the past with the advent of other cutting-edge innovations. Meanwhile, enterprising businesses and individuals will continue testing the boundaries of what is legally acceptable in this rapidly-emerging digital frontier. Terrance Blau Terry Blau is a technologist and blockchain evangelist. As a data scientist and AI researcher, Terry has led projects funded by DARPA and the NSF. Currently, he is the Technical Operations Lead at Blockchainsure, where he develops deep neural networks for dynamically-priced insurance contracts. "IP ownership is hotly debated in the blockchain community..." Libertarian-leaning maximalists tend to hate IP claims and push for open standards for everything. Others are the opposite, filing copyright, trademark, and patent claims in the U.S. and elsewhere. But going after infringers is difficult since the blockchain community is a global network. If someone copies and resells your NFT jpeg but lives in another country that doesn't recognize judgments from your courts, how do you go about stopping that? There are some sophisticated technologies you can deploy to uniquely mark specific files that are associated with specific NFTs, and that may be part of the next generation of NFTs in the marketplace. It still doesn't solve the enforcement issue, but it can make it clear whether a particular jpeg file is original or not, which is part of the overall perceived value of any NFT. Laura J. Winston @LauraWinston Laura J. Winston is the chair of the Intellectual Property Group at Offit Kurman, P.A. Laura's law practice focuses primarily in the areas of trademarks, copyrights, and the internet, representing U.S.-based and international clients, from individual business owners and small startup ventures to established publicly traded companies. "If you're thinking of minting NFTs (and who isn't these days), there are IP considerations both for..." Protecting your rights and avoiding infringement of others' rights. An NFT can be subject to IP protection similarly to more traditional assets — for example, an NFT containing original artwork and/or written content is subject to copyright protection. In order to be able to assert those rights against a copycat, it is necessary to register the copyright for your NFTs with the U.S. Copyright Office. NFTs that are sold under a particular brand are goods subject to trademark protection, and those brands will have better protection if registered as trademarks in the U.S. and other jurisdictions. Many have already done so — there are more than 4,000 U.S. trademark filings for non-fungible tokens.

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