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Intellectual property risks being under-estimated by many organizations

Global organizations are largely failing to understand the intellectual property (IP) risks facing their organizations and the value of their intangible assets, according to a report published by Marsh and Liberty International Underwriters (LIU).

In the ‘2011 Intellectual Property Survey Report’, three-quarters of respondents were unable to quantify the proportion of their firms’ value that could be attributed to intangible assets or goodwill. This is despite almost 70 percent of firms identifying the protection of IP as crucial.

In addition, the majority of firms said that IP was not specifically included in their risk management programmes and only 16 percent of respondents bought insurance coverage for the main types of IP risks.

Fredrik Motzfeldt, Communications, Media and Technology Leader, Europe, the Middle East and Africa, Marsh, commented: “Intellectual property is often the critical asset for firms to protect. Our survey shows there is a real need for organizations to take a more proactive risk management approach to the protection of vital assets.”

Matthew Hogg, Vice President, Strategic Assets, Liberty International Underwriters, added: “Failure to provide adequate protection for IP has the potential to threaten an organization’s survival. The survey makes clear that firms in the US are taking this threat more seriously than their European counterparts; this could impact global competitiveness.”

The report also highlights several other differences between the US and Europe:

* Over 70 percent of respondents in the US stated that patents were of high or medium importance, compared to just 56 percent of European companies;

* 75 percent of European companies perceived the risk of patent invalidity proceedings to be low, against only 37 percent of US companies;

* European respondents perceived the risk of IP litigation in the US to be higher than their actual US counterparts, with 33.3 percent of Europeans seeing it as high risk, against only 15.8 percent of US respondents.

The 2011 Intellectual Property Survey Report, created by Marsh and LIU, gauges the current understanding of intellectual property (IP) trends and risks among businesses globally.

www.marsh.com
www.libertymutualgroup.com

•Date: 19th May 2011 • Region: World •Type: Article • Topic: Enterprise risk management

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