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Manufacturers Losing Intellectual Property to Security Breaches

Although manufacturers understand the importance of securing their intellectual property, few have adequate procedures in place to keep pace with today’s escalating risks.

Q3 2014
According to a survey of nearly 4,000 IT managers across 27 countries — conducted by Kaspersky Lab in partnership with B2B International — 21 percent of manufacturers suffered a loss of intellectual property (IP) within the past year. Malware was the most common cause of data loss incidents for manufactures, although other types of cyber-incidents — including software vulnerabilities, theft of mobile devices, network intrusion, etc. — were also cited as sources of IP leakage.

Manufacturers understand the importance of securing their intellectual property. According to the survey, they rank “internal operational information” and “intellectual property” as the two types of non-financial data they fear losing the most. Fear of losing “customer/client information” is ranked the lowest out of all business segments, probably because manufacturing facilities are less likely to store this information in the first place.

Nonetheless, few organizations have kept pace with today’s escalating risks, and fewer still are prepared to manage future threats. “You can’t fight today’s threats with yesterday’s strategies,” says Gary Loveland, a principal in PwC’s security practice. “What’s needed is a new model of information security, one that is driven by knowledge of threats, assets, and the motives and targets of potential adversaries.”

According to PwC’s Global State of Information Security® Survey 2014, executives are funding enhanced security activities, with budgets increasing from an average of $2.7 million in 2009 to $4.3 million last year. However, those seeking to undermine these efforts are one step ahead — security breaches increased 25 percent in the last year alone, says the PwC survey. And, unfortunately, even when in place, security technologies and policies often do not prevent incidents, according to the 2013 U.S. State of Cybercrime Survey, co-sponsored by PwC.

When it comes to intellectual property, the Cybercrime Survey notes that the percentage of respondents who have procedures dedicated to protecting IP has actually decreased — from 22 percent in 2011 to 20 percent in 2013. The percentage of those who conduct a regular review of users and access to IP also decreased from 37 percent in 2011 to 31 percent in 2013. Neither finding bodes well in today’s “elevated risk landscape.”

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