Dow used it to save $50 million and increase their licensing revenues 5 fold to over 100 million dollars. And Dupont used it and saved $64 million in taxes.
Your business intellectual property can do more than keep competitors at bay, or give you a competitive edge when selling your products or services. It also can increase your bottom line by decreasing your top line.
Some of your most valuable business assets are the hardest to find. Statistically, these assets represent 75 percent of your company's value. It's also an asset that saves you money. But the problem is if you don't know what you have, how can you use it to cut costs? One of the core tools for managing IP assets is an IP audit. How effective is this tool?
In 2014, the UK conducted an IP Audit study of small and mid size business. The results showed over 40% of the companies identified new business opportunities, and one-third reported increasing their revenues as a direct result of the IP Audit. In addition, about 20% reported securing new financing as a result of the IP Audit.
Maintaining your tangible assets such as plants and equipment costs money. The same is true of your IP assets. Here are 5 ways an IP Audit will save you money.
1. Stop paying for unused or obsolete IP: You'll identify IP that's not being used, but you're still paying renewal and maintenance fees for those IP's. These fees add up. Worldwide maintenance fees for a single patent can run $100,000 or more. If you're not using the IP or it's not valuable to your business, you can sell, license or donate it.
2.Reduce your new product development costs: Why recreate the wheel if it already exists. An IP audit will help reduce your R&D costs by identifying similar IP's in the market. Rather than spending money to develop a similar product, you can license an IP that's ready to go.
3. Get some tax deductions: If you donate unused IP, you can get it's fair market value as a tax deduction. You get an immediate cost savings, both from the tax benefit and maintenance costs.
4. Increase your borrowing power: a well-managed IP portfolio can be used as collateral for a loan. It can improve the creditworthiness and increase the borrowing power of your company.
5. Avoid costly litigation: Knowing what rights are secured for each of your IP assets can help you avoid infringing on other IP. Keeping track of these rights is critical, especially if you're in a very competitive industry where lots of new patents are filed each year.
An IP audit is the only way to organize, preserve, and enhance your IP. It helps you find and correct any problems with your IP rights. It lets you find unused parts of your IP that can be put to work. It helps you identify and avoid risks of your product or service infringing on another IP. Most important an IP audit can save you money and increase your bottom line.
Rand Brenner is an IP professional whose passion is helping inventors, startups, and businesses of all sizes use licensing to turn their IP into income-producing products, services, and technologies. His decades of experience run the gamut from medical devices to food technology to consumer products. He's licensed some of the biggest Hollywood entertainment blockbusters including the Batman Movies (1 and 2), and the number one kid's action TV show, the Mighty Morphin Power Rangers. Rand speaks about licensing and is a featured speaker at investment conferences, trade shows, colleges, and startup events. His first book, Hidden Wealth: The Money Making Power of Licensing was released in 2019 and is available on Amazon.com. He's also a published writer with articles appearing in several prestigious trade magazine including The Licensing Journal, Intellectual Property Magazine, and License India. Rand also mentors at the Cal State Fullerton School of Business and Economics and is a judge for their startup business plan competitions.