Safeguarding Intellectual Property and Addressing Corruption in the Global Supply Chain
As multinational companies increasingly engage suppliers, agents, distributors, and other third parties in emerging markets, they confront increased risk of their intellectual property (IP) being infringed upon or of being implicated in corrupt activities by these independent firms.
Guarding against IP infringement and violating anti-corruption laws among employees is difficult enough for companies with operations around the world. It is even more challenging to prevent inappropriate behavior by the employees and contracted workers of tens of thousands of third parties over which a multinational company lacks direct control. The harms from such misconduct include lost revenue, possible business disruption, litigation, and significant civil and criminal fines for violating anti-corruption laws as well as the potential for broader damage to a company’s reputation and brand.
The Conference Board convened a Research Working Group to study the issues of IP protection and preventing corrupt activities in the global supply chain.The conclusions in this report are based on the discussions of the Research Working Group, insights from additional multinational companies and law firms, a review of previous reports and media coverage of these issues, and two surveys: one addressing IP protection and a second addressing anti-corruption compliance.
Specifically, this report addresses the rising costs of IP infringement, preventing corrupt activities including training employees in this area, the challenges posed by global supply chains, due diligence, developing effective compliance programs and contract language, risk assessments and audits, and oversight.