Risk is the chance of something going wrong, and the danger that damage or loss will occur. By its very nature, there are both rewards and risks associated with intellectual property (IP). For anyone involved in IP, then IP related risks are part of working life. However, many ignore the risks associated with IP or only react when the risk has materialized, which is most times too late. The obvious IP related risk is that a business may infringe the IP rights of a 3rd party. But these are not the only IP risks that should concern an organization. Any business professor will tell you that the value of companies has been shifting markedly from tangible assets, "bricks and mortar", to intangible assets like IP in recent years. Research has indicated that intangibles now account for about 80% of the total value of many companies. There is no data available on the scale of the risks associated with IP, but one can assume that it is significant, and probably around this 80% mark. IP risk management is a practice that deals with processes, methods, and tools for managing IP risks in a project, business unit or organization. It is initially about the identification, assessment, and prioritization of IP related risks followed by the coordinated and cost-effective application of resources to reduce or eliminate the probability and/or the impact of these IP related risks to the organization. IP risk management involves understanding, analyzing and addressing IP related risks to make sure organizations achieve their objectives. It must be proportionate to the complexity and type of organization involved. Proper IP risk management is an integrated and joined up approach to managing IP related risks across an organization and its extended networks. IP risk management is about ensuring that the business really understands its IP related risks, and then mitigates pro-actively. The rationale for this may be driven by the need for freedom to use technologies already in use or being considered for use in the company’s products, but there are many other reasons why businesses need to take IP risk mitigation seriously. The focus should be on risk mitigation and not just of risk evaluation. Risk mitigation covers efforts taken to reduce either the probability or consequences of a threat. Risk mitigation efforts may range from physical measures to financial measures.
