Businesses routinely conduct inventory audits to account for goods on hand, stocks of parts or components, equipment audits to account for machinery and its condition, and financial audits to locate and account for cash and business valuation. Businesses that do not conduct audits invariably run into problems.
Intellectual Property (“IP”) represents an asset class that businesses should regularly audit for a variety of reasons, including:
- Identify Overlooked Assets. IP can take various forms. There are patents, trademarks, copyrights and trade secrets. Additionally, there may be licenses or other agreements related to these forms of property. An IP audit can help your organization recognize these assets.
- Solidify Ownership. In some instances, a business may not actually own all rights to the IP it holds. In certain situations (for example, where a third-party is engaged to design a logo or where there is an acquisition), the third party or seller might retain rights to the IP at issue. A thorough IP audit will involve verifying ownership of all IP assets to ensure your business holds all relevant rights.
- Ensure Protection. IP assets must be protected and maintained. Just as an equipment audit may reveal that a vehicle must be added to an insurance schedule or that a machine needs repair, an IP audit will reveal what might be required to protect IP assets and potentially avoid situations where rights might lapse or go unprotected. An IP audit can help make certain that all your rights are adequately protected and current.
- Maintain Secrecy. Trade secrets are a form of IP and can often be a business’ most valuable assets. Not only will an IP audit help identify potential trade secret information but can also help solidify secrecy of that information. An IP audit can help ascertain whether your business is taking reasonable steps to prevent disclosure of proprietary information by employees, vendors and business partners.
- Plan for Future. A periodic evaluation of IP assets will help identify areas where your business creates or obtains these assets and can result in formulating processes and procedures to ensure assets are protected as they emerge.
Our Intellectual Property practice group is available to assist with auditing your IP assets and to devise plans to protect those assets. For more information, please feel free to contact me at firstname.lastname@example.org.