When companies consider theft risk, they're usually analyzing threats to their physical assets or the chance a rogue employee will engage in embezzlement. But sometimes the biggest, most detrimental loss a company could face is intangible. Intellectual property, or IP, refers to creations of the mind. Many IP assets are protected under law as copyrights, trademarks, or patents. Other forms of IP can include trade secrets, manufacturing processes, and other know-how that is difficult for competitors to replicate.

For treasury departments in companies that rely heavily on IP to generate value, protecting intellectual property may be as important as protecting cash flows and leading corporate investment strategy. After all, for many businesses, IP is the goose that lays golden eggs. Wise treasury professionals keep an eye on all the company's golden eggs and take active measures to shore up the source of each egg.

IP Theft in the Headlines

Companies face substantial losses as a result of IP theft. The Commission on the Theft of American Intellectual Property estimates that annual costs from IP losses range from $225 billion to $600 billion. It's also worth noting that the loss of IP is different from other types of loss. Stolen or damaged inventory or vehicles can be replaced through insurance, but the effects of stolen IP truly cannot be canceled out. IP infringement may rob a company of revenue and put downward pressure on its prices.