Intellectual capital and economic espionage: new crimes and new protections

Purpose - Intellectual capital's (IC's) rising value in the production of wealth has been mirrored by its increasing vulnerability to crime. Among these are the increasing frequency of cybercrime, the intangible nature of IC which facilitates theft and the lack of legal remedies for the theft of IC. Taken together, these factors have created a new environment in which IC is uniquely at risk from financial crime. The purpose of this paper is to attempt to examine the efficacy in current legal remedies and formulate suggestions for better protecting IC. Design/methodology/approach - The analysis is conceptual, using frameworks drawn from legal scholarship and traditional views of law‐enforcement practice. Findings - This paper explores the risks of crime inherent in IC and a distributed cyber environment in greater detail in order to demonstrate that traditional legal remedies are largely ineffective to protect IC property rights and that, given this policy environment and the nature of IC itself, prevention is the only reasonable means for protecting IC. Research limitations/implications - Conceptual papers offer an intrinsically different form of evidence than empirical studies. Significant public debate prior to enacting legislation and subsequent empirical testing of the paper's propositions, if enacted into legislation, are strongly encouraged. Practical implications - The paper includes implications for the development of legal protections based on guarding sensitive information at its source, rather than traditional reactive policing and legal actions after a theft has been committed. Originality/value - This paper fulfils an identified need to propose useful and concrete legal solutions that deal with the increasing importance of IC and the concomitant frequency of crimes that involve its theft.