Patent infringement has reached the point where companies can no longer rely on litigation alone to protect their intellectual property, experts say. And those on the wrong end of such suits have to take them more seriously.

The intellectual property of the world’s 500 largest corporations is now estimated to be worth over $3 trillion, roughly 80 percent of their total market value. Yet some $59 billion of that is stolen in the US each year, because few companies have systems and controls in place to manage and monitor the risk that others are to stealing their intangible assets or that they themselves are in violation of someone else’s patent.

Instead, companies have relied on litigation to deter theft. But with recent lawsuits resulting in large awards, disputes are increasingly expensive to fight in court. The average litigation is $2.5 million per case, and with costs soaring by 10 to 15 percent a year, some settlements are now topping the billion dollar mark.

Of course, those companies that violate patents are increasingly at risk. But they face not only larger penalties and settlements, but also significant shareholder lawsuits on the grounds that they should have known better.

“One can easily image a willful infringement judgment trebled to one billion in damages being followed by a shareholder suit to recover the billion dollars from corporate officers and directors because of a lack of oversight, especially where the company had no reporting and information systems and controls,” said Cathy Reese, co-chair of the IP risk management practice of the law firm of Fish & Richardson. “Enterprise risk management without IP makes no sense and can leave a company very vulnerable.”

To head off such costs, companies must involve security and compliance groups in the analysis and decision process when adopting new technologies, said Don Gray, chief security strategist, Solutionary, an information security company.

Gray said that would help identify potential risks up front and allow controls, counter-measures, and supplemental procedures to be developed and implemented, said Gray.

Some observers say the problem reflects a larger struggle that companies have dealing with risk of all kind.

“The fact is, risk management is the step child of finance, and if it does not contribute to the business’ income, it gets cast aside,” said Tracey Swift, an independent insurance broker. “The sad thing is that this kind of haphazard or selective risk management will cripple your organization or bankrupt it in the long run,” she added.