SEC Guidance on Intellectual Property and Technology Risks Associated with International Operations

On December 19, 2019, the SEC issued guidance regarding considerations companies should take into account with respect to disclosing risks related to intellectual property and technology associated with international operations.

If relevant to a company’s international business operations, the SEC is advising that disclosure of risks of theft of technology, data and intellectual property by private parties or foreign actors should be considered, including direct theft by state actors or by reverse engineering or similar means.  Companies should assess whether agreements with foreign parties or legal or administrative requirements, such as license agreements granting atypical rights to foreign persons or regulations that require data to be stored in foreign jurisdictions, serve to compromise intellectual property or technology.

Consideration should be given to the effect potential theft may have on a company’s business, including reputation, stock price or business value, and to the measures the company has adopted to protect against such risks.

The guidance issued by the SEC can be found here.

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