Businesses routinely check on their inventories and physical assets to make sure everything is accounted for, operational, and adequately protected. However, in addition to physical assets all businesses also have intangible assets. Indeed, some businesses have only intangible assets. Among these intangible assets are the things a business creates and offers its customers, its name, the name of products and services, written materials and customer lists are all potentially protectable Intellectual Property assets. An IP Audit will help identify these kinds of assets and ensure their adequate protection. Just as a business regularly reviews its physical assets, it should also review these intangible IP assets by undertaking periodic IP Audits.
When are IP Audits necessary?
Like physical asset inventory audits, businesses should approach IP Audits as potentially annual events. Not only does this ensure that existing IP assets are accounted for and properly maintained, but this will allow for identification of any newly created assets. As IP law is a rapidly changing field, an annual audit will also ensure that any new legal requirements or twists are properly dealt with. Intellectual Property should also be audited in connection with any major corporate transaction such as a merger, acquisition or divestiture. Similarly, financing transactions may also implicate IP assets and, if so, they should be audited during the transaction.
What does an IP Audit look for?
Intellectual Property falls in four main categories: Patents, Trademarks, Copyrights and Trade Secrets. At its most basic, an IP Audit reviews your business and its output to identify these items. IP can take many forms and can include such things as product designs, company name and logo, website content and proprietary customer lists or pricing data. Once identified, sufficiency of protection for these IP assets is reviewed and a plan can be implemented to enhance protection if needed, or to maintain status quo. Any applications to register trademarks, copyrights or patents can also be considered if necessary, as well as title updates.
In addition, a more detailed IP Audit may be needed to look deeper into company policies regarding creation and protection of IP Assets in order to ensure such creations are owned by the company and not employees or contractors. Similarly, employment issues pertaining to IP can be reviewed, such as non-disclosure and non-compete agreements with key employees. If any IP licenses are involved—either inbound or outbound—those terms can be reviewed to ascertain compliance. Company policies regarding use of trademarks or copyrighted materials can be reviewed, as well as advertising and website use and privacy policies. Programs can be implemented to monitor for unauthorized use of IP Assets by third parties and potential infringements can be addressed.
Because IP issues touch so many different aspects of a business, there are undoubtedly other potential areas where review might be desired as well. Indeed, a company’s products or industry focus might raise unique issues. In any event, the ultimate goal of an IP Audit is to identify those assets that provide your business with its goodwill and competitive advantage and to protect those assets. Contact us to schedule a consultation to help you understand your Intellectual Property and devise an audit program right for your needs.