Previously in our Intellectual Property (IP) Best Practices series, we introduced step seven to maximizing your IP: discovering employee created IP. Please check back every Monday for the next part in this series.
Conducting regular intellectual property audits is integral to a successful IP strategy. A company is comparable to a living organism: if taken care of and provided the right nutrition, it grows. As companies scale, the same policies and compliance procedures that may have worked when the team consisted of a handful of employees, may not work in a larger company.
An IP audit is a systematic review of the existing IP portfolio and also analyzes new opportunities and risks. Its most commonly understood purpose is to help identify and rectify any mistakes made regarding IP registration and keeping track of licensed IP. But an ideal IP audit does much more. Not only does a good IP auditor create a comprehensive report of the IP assets of a business but they also provide an overview of competitors’ IP. Identifying competitors’ IP help prepare a strategy to develop products that will avoid infringing upon those rights and setting up safeguards. Entrepreneurs and cash-strapped startups have limited funds and sometimes despite being in the right, it is advisable to avoid litigation. By predicting market trends and how IP will develop, an audit can help protect IP while the increased knowledge will help prevent stepping on anyone else’s toes. An audit also locates weaknesses in IP and suggests ways to strengthen them in their existing form or reorganize them so that they are better able to withstand a legal challenge or a change in law. An IP audit refreshes knowledge of prior registered IP and whether further action needs to be taken to preserve it. In case your business has licensed its IP, then it ensures compliance.
Although IP audits should be conducted as regular business practice, there are some circumstances under which it is absolutely essential you do so. If a business is undergoing a merger, acquisition, or seeking investment, conducting an audit may reveal value you did not know existed. The value of IP changes over time, so make sure you know the current market price before licensing IP or transferring it. It is worth investing in a good IP lawyer to conduct an audit as you may end up leaving money on the table. A significant change in the law may alter the protection afforded or compliance required by your business to prevent infringement. An added bonus is that by conducting IP audits over time, the point person of the business dealing with the IP auditor will become experienced in identifying IP opportunities themselves and can benefit the business by utilizing opportunities before they are lost.
I won’t lie; IP auditing can be a boring and time consuming task, taking team members away from more facially productive endeavors. But like it or not, it is one of the most important tasks you must perform. The easiest way to deal with it is to have significant team members use Traklight's ID your IP every quarter. This way, key personnel interacting with the auditor have an idea about the IP of the company. Providing the auditor with the reports generated will streamline the process. This not only saves you time to focus on other responsibilities but since IP attorneys’ bill by the hour, it will save you money as well by compiling useful data for the attorney,. Considering the importance of a good IP audit, it is advisable to employ an experienced IP lawyer to conduct your audit.
Ensure a more smooth and seamless IP audit by identifying your intellectual property with ID your IP. Get started today.