Day-to-day oversight of intellectual property issues is usually best handled by company management, in-house counsel or outside legal counsel. However, with the ever growing scrutiny faced by corporate directors in the wake of recent corporate scandals and government policing, there is an increasing importance for company directors to oversee intellectual property assets more closely than ever before.
Intellectual property is ubiquitous in almost all business sectors. Intellectual property procurement and enforcement are becoming more and more important to most businesses, and the costs attributable to intellectual property procurement as well as intellectual property law suits are growing based on outside counsel costs, time, as well as the number of suits filed. Furthermore, there are substantial increases in settlements and judgments in intellectual property litigation. These factors alone suggest that company directors should maintain intellectual property oversight.In United States Directors’ Responsibility for Intellectual Property in US Corporations, Robert Sterne, Trevor Chaplick and David Berger recommend that the primary focus of corporate directors should be to thoroughly oversee intellectual property management.
They suggest that directors should:
1. Take the time and effort to provide the necessary oversight of management;
2. Seek counsel to ensure good process occurs and is appropriately documented; and
3. Regularly review the company’s intellectual property assets and related intellectual property strategy.
The strategic importance of intellectual property and the risk of liability from intellectual property litigation are growing at a time when potential liability of directors for the inadequate oversight of management has never been higher. Thus, the potential risks to directors are simply too great to ignore and to not implement some type of policy to protect directors against such risks.
Rodney D. Ryder
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