Your intellectual property is your most valuable business asset. It’s core to your future revenues, and you must keep track of it, especially if you are trying to license it or raise capital.
That’s why you need an IP audit. It creates an inventory of your IP assets and includes verifying the types of IP, registration status, where and how it’s being used, any outstanding issues, such as upcoming fee payments or pending litigation, and what legal or other issues must be fixed. An IP audit is even more important for non-registered IP, such as trade secrets and professional know-how, as it is the only way to package and track your IP for licensing or sales.
If intellectual property is your only asset, it’s even more critical that you complete the IP due diligence process and prepare an IP audit report. When potential licensees, investors or an M&A partner is interested, you’re ready to give them the information they need to assess the risk, value, and ROI of the transaction.
The Benefits of an IP Audit
A recent survey of small and mid-size businesses in the UK found that over 80% benefited and took action with their IP as a result of the IP Audit:
- 85% increased their awareness of their IP value
- Over 30% identified new business opportunities
- 43% identified new licensing opportunities
- Almost 20% reported acquiring new customers
- About a third reported securing new equity and grant funding
- 70% reported refocusing their business strategy to prioritize their IP
- Over 87% would recommend the IP audit to other businesses
Key Steps in the IP Audit & Due Diligence Process
The first step in the audit process is to find the readily identifiable IP. Assets falling into this category will include any registered trademarks, copyrights, designs or patents owned by the business, any licenses to third parties and any licenses from third parties, including cross-licenses. Also included in this category are things such as in-house work manuals, databases, recipes, franchise agreements, publications, and product/process know-how.
After identifying all the IP assets, the second step is to check the legal registration status and what needs to be registered. Non-registered IP, such as trade secrets, are reviewed to make sure steps are in place to protect confidentiality.
The third step is evaluating how you are using your IP. Each IP is ranked in importance by looking at factors such as whether they are integral to the company’s products, services or technology, the intellectual property life expectancy, and its impact on your company’s business and profitability.
The benefits of completing an IP audit include better use of your IP assets, integrating them into your overall business decisions, capitalizing on new revenue opportunities, increase company value and making informed decisions on what to do if your company’s IP is infringed.
IP Audit Consultation
Contact us at firstname.lastname@example.org to schedule a free consultation to discuss your IP audit requirements.