Mon 24th Aug 2020
Is it time to carry out an intellectual property audit?
Services: Board support and consultancy, Brand protection, Company and domain names, Design rights, IP audit, IP licensing, IP portfolio management, IP strategy, Patents, Preparing for funding or flotation, Trade marks
Sectors: AI and data science, Brand owners, Chemistry, Cleantech and renewables, Electronics and telecoms, Fashion, Finance and insurance, Food and drink, Life sciences and health, Materials science, Mechanical engineering, Software patents
An audit of your intellectual property will pay dividends as it enables a business to identify new revenue streams, enhance business value, implement best practice, assess and reduce the risk of competition. It is particularly important for any business with a strong brand or knowledge-based products or services.
During the pandemic, every business owner and executive has had to review their business operations in detail to ensure its survival through this challenging time. Is plant and machinery fully utilised? Do we need so much stock? Are all the staff really required or can they work in a new way? Are city centre offices really needed, or can staff work from home?
Such questions have been much in the news, but they all focus on a business’ tangible assets. What about those assets which are invisible? Do you still need all the trade marks or domain names that have been registered? Are there brands which have the potential for being licensed?
If you are looking for ways to generate new income or opportunities to save costs, then James Cornish, an IP expert at Page White and Farrer comments, ‘An audit of your intellectual property will pay dividends as it enables a business to identify new revenue streams, enhance business value, implement best practice, assess and reduce the risk of competition. It is particularly important for any business with a strong brand or knowledge-based products or services.’
What does an IP audit cover?
An IP audit provides a systematic review of all the intellectual property which your business owns, uses, has developed, or has acquired. This can include inventions, patents, trade marks, designs, company names, domains, trade secrets, copyright, databases and business methods.
In addition to identifying and assessing these IP assets, an audit will review any relevant policies, agreements and compliance procedures.
Following the assessment, it will be possible to produce a practical action plan to ensure that IP is managed appropriately to meet the business goals.
When is an IP audit beneficial?
There are several situations in which a business will benefit from an audit of its intellectual property:
- Startup or scale up - if you have never carried out an IP audit before, it is likely that you may have accumulated a wide range of IP assets without a system to manage them and to ensure that you maximise value from them. An audit is a valuable first step to capturing the value in your business.
- Your business has grown or restructured since your last audit – and you may have acquired new assets. Policies and procedures may be out of date and the risks in the market may have changed. We recommend that you refresh your IP audit every 5 years.
- You are planning to spin out a new business – it is important to be clear about the IP which will be part of the new company and that which will remain, and any which might need an agreement for sharing.
- You are interested in selling your IP or your business – anyone wishing to purchase part of or a whole business will undertake due diligence and the better prepared you are, the stronger your negotiating position will be.
- You would like to license your IP – this is an effective means of generating new revenue streams and entering new markets. As your business expands, it is easier to track and manage licensing agreements if they are systematically recorded and reviewed regularly to ensure you are still getting the right returns.
- You are raising external finance – and lenders want assurance in regard to the security of your IP, the potential value in your busines and risks in the market.
- If you are planning a joint venture, merger, takeover, or stock exchange listing – due diligence will also be required, and forecast business value and income growth will depend on your IP assets.
- When the law has been changed – for example, after the Brexit deal is known, it would be advisable to carry out an IP audit. Alternatively, if there has been a significant legal case which impacts your business sector.
- New management or a new legal team – will want to know what IP assets are available, they may bring new ideas for the business and wish to implement new policies and procedures.
- You wish to take steps to enforce or defend your IP rights – before commencing enforcement action against a competitor who has been infringing your rights, it will serve you (and your legal team) well to have all the information about your IP in one place and up to date.
As businesses grow and evolve, it is not uncommon for intellectual property to be scattered around and no single person has an overview of this important asset. Those companies which actively manage their intellectual property assets, benefit from capturing this value and minimising risks.
How we can help
To discuss whether now is the right time for an IP audit in your business, contact James Cornish at firstname.lastname@example.org or on 020 7831 7929.
This briefing is for general information purposes only and should not be used as a substitute for legal advice relating to your particular circumstances. We can discuss specific issues and facts on an individual basis. Please note that the law may have changed since the day this was first published in August 2020.