Asia Report - Spring 2012 - 2nd Issue
Stop Eating My Cake
Minimising Damages from IP infringement
May 2, 2012
Chairman, Asia Pacific Region
In this issue of the FTI Consulting Global Insights Asia Report, managing director Stephen Lau sheds more light around intellectual property (IP) infringement, following on from the previous issue, where Robert Youill discussed the challenges companies face when protecting their IP resources.
15% of companies reported incidents of IP infringement.
According to a global crime survey, 15% of companies reported incidents of IP infringement. This is the second most common type of reported fraud case. The average loss for this theft was US$1.9 million, which was the highest monetary loss among common fraud cases.
IP infringement is becoming an issue for many organisations, especially those in emerging markets like China. Findings indicate that 44% of IP infringement cases involve perpetrators from China.
IP licensing seems to be the solution, yet many licensors experience issues such as the underpayment of royalty fees and the non-disclosure of revenue by hiding sales in accounting records. Non-compliance is possibly a combination of accounting or clerical errors, deliberate understatement, or the result of fraud. This suggests the lack of a comprehensive and effective licensing programme.