No industry is a stranger lawsuits, but for the technology sector, intellectual property (IP) and patent disputes, followed by cybersecurity and data protection issues, appear to be among the top legal cases that keep technology company managers up at night.
According to the 17e Annual Investigation of Lawsuit Trends by Norton Rose Fulbrightsurveying hundreds of internal process leaders of international companies, labor and labor disputes are also high on the list for technology companies.
Startup teams, legal advisors and other internal stakeholders looking to address these legal challenges must consider three key factors impacting the industry.
IP Disputes: The Industry’s Top Litigation Concern
Technology respondents were more concerned about IP litigation than any other potential source of litigation, with 46% citing them as the most worrying, compared to 16% across all industries.
Since the core function of most technology companies is to develop and market innovative technology and solutions, it is not surprising that technology companies identified IP litigation as the most relevant and important to them. Respondents cited the critical nature of IP assets to their core business as the reason litigation was of such concern.
The costs associated with these litigations, particularly in defending against patent infringement allegations, were a top concern of respondents. Defending against IP litigation can be a resource drain, especially given the ongoing costs and prevalence of litigation initiated by “patent trolls” – entities primarily engaged in obtaining and enforcing patents against technology companies – which reduce the costs associated with the use of the patent far beyond to provide goods and services.
Many respondents are reportedly expanding their legal teams. Strategies include adding additional in-house legal staff, engaging outside counsel to focus on specific IP strategies, expanding investigation and enforcement actions against potentially infringing activities, enhancing corporate patent protection, and building a more mature and robust contract drafting and review process for IP related contracts.
Tech companies feel exposed to cybersecurity, data protection disputes
Technology respondents named cybersecurity and data protection issues as the top dispute trends, more than any other industry – 71% said they felt more exposed to cybersecurity/data protection disputes, compared to the previous 12 months. They said it was critical to protect both their own business information and that of their customers, especially in an increasingly global marketplace.
