Do employees and contractors understand the meaning and importance of intellectual property?

John Villasenor surveyed his graduate engineering students at UCLA to test their “awareness” of intellectual property. Of the nearly 60 students who completed the survey, 68% could not answer the question “what is a trade secret?” He found similar results with other IP.

• Trademarks? 51% could not answer;
• Copyrights? 32% could not answer; and even
• Patents? 21% could not answer.

The ramifications of this are huge and widespread, from the political to national security. Ignorance can be costly. As Villasenor states, “An engineer who doesn’t understand trade secrets and the obligations that accompany them is far more likely to walk out the door with proprietary computer code on a USB stick when he or she moves to a new job.”

Though the solution may be as Villasenor recommends, mandatory instruction on “IP Basics” at the graduate level in our colleges, more immediate to the business sector is the need to define terms in employment contracts and employee manuals. Employers should not take for granted signed NDAs and IP assignments are understood by their new hires and contractors. As now over 72% of the average company’s assets are intangible, and future benefit streams likely will flow from intellectual properties, employers must take seriously the need to educate their researchers on IP value. Analysts compensating for risk should look for evidence employers are aware of this threat.