Intellectual Property Auditing is the process of identifying existing, acquired or previously unidentified IP and how it can be applied or used differently. For innovation and IP reliant companies this is a valuable process to understand and identify risks and opportunities, catalogue and then commercialise IP. Many innovation companies can successfully boost their growth via this process.
The scope of IP in each business is different but for most start-up and innovation companies it is associated with their goodwill (branding and name), systems and process (databases, client information and system software) and products (via the underlying idea or know-how).
What IP do you own ?
Most businesses track their inventory and account receivables, IP should be much the same. It has distinct and actual value to a business and if you do not know what you own, then you are not going to be able to commercialise it properly.
Understanding the different types of IP (for instance, copyright, know-how, designs etc.) assists in being able to identify it.
Do you actually own the IP or have the right to use it?
Many businesses are shocked to learn that they don’t actually own the IP they use, whether that be an idea, logo, system, know-how or software.
The reasons can be varied but common examples we see are:
- failing to ensure contractors are engaged properly via agreement in writing with IP ownership clauses,
- not registering transfers,
- purchase agreements not finalised, and
- licenses not purchased or paid for (common issue with software agreements).
Failing to properly secure ownership can result in protracted legal disputes. It can also lead to disappointment when selling the business or seeking capital investment when the investor identifies this failing as part of due diligence and withdraws interest or reassesses the valuation.
How can you use your IP better or differently ?
Once you have initially identified your IP, you should consider how it may be used differently or more effectively. This is about looking for growth opportunities or productivity gains from what you already own.
Infringement & Enforcement
You should also consider whether anyone else is infringing your IP by conducting a market competitor analysis. Infringement by third parties can dilute your market share and product reputation.
If you do identify infringement you should have a procedure for how you will notify and enforce against those parties.
A lot of information, including checklists, can be found online about audits. However it is advisable, at least for the first time you conduct an audit, to engage an IP professional to assist and guide it.
IP Audits should be conducted on a periodic basis, but in particular they are recommended when preparing a business plan, early stage of start-up and upon preparing for a sale or capital raising.
Portfolio Management
Once you have audited your IP and established a strategy you will need to manage it. IP portfolio management is a record, often called a register, of all your IP which typically includes the following details:
- Ownership:
- Do you own the IP or is it under license?;
- Registration expiration:
- When does any statutory IP protection expire or need renewing? This can be complex particularly when involving international registrations;
- IP Licensees:
- Who has the right to use your IP?;
- Register of Policies and Procedures;
- Industry/business specific requirements; and
- Infringement monitoring:
- It is important to undertake periodic or ongoing checks, including of pending registrations and the internet amongst other searches to ensure no one is infringing your IP.
A portfolio should be the end product of your first audit which you can build from in each subsequent audit.
Need to know more ?
Corson Fiske can provide a comprehensive IP audit on your organisation uncovering your most valuable intellectual property assets that you may not be aware of. From this audit we can develop and undertake an IP strategy that progressively structures your IP so that you have adequate protection for maximum commercial value.