Know Your IP – An Introduction to IP Audits
Intellectual Property Rights (IPRs) hold great importance for your business and ensuring their protection as a well as maximising their commercial value and potential as assets can be vital.
“IP Audit” is a term which often appears in legal and press articles without explaining its practical implications as it is often assumed the business community is familiar with them. However, this is often not the case.
I firmly believe that IP Audit is a very helpful tool which remains underused by many businesses and entrepreneurs, most likely because they are not always aware of the fact it is tailored to their specific circumstances and that it can be useful to them regardless of the size of their business or the stage of its life cycle.
If you would like to find out more, I invite you to read on.
What is an IP Audit?
An IP audit is a review of your IPRs conducted by a legal professional specialising in IP law.
It can help uncover opportunities to capitalise on the value of your IPRs and assist with protecting your ability to enforce them.
IPRs include trade marks, copyright, designs and patents, as well as certain associated rights. As part of an IP Audit, we talk to you about your current business and future plans to identify which IPRs are key to you. We then conduct the Audit exercise which involves a review and legal analysis of the relevant information provided by you and setting out our conclusions and recommendations. The scope of an IP Audit is tailored to your individual needs.
Most frequently, the results of an IP Audit allow you to:
- Identify existing registered and unregistered IPRs
- Identify existing commercial contracts with an IP element (such as IPR licenses) or recommend putting them in place
- Provide recommendations regarding the above areas going forward
- Recommend procedures and practices to adopt with a view to achieve effective IP management and monitoring, and in turn, improved protection of IPRs
- Recommend procedures to adopt in response to an IPR infringement, and to limit risk in respect of the same
- Recommend IPR management and protection employee training
Do you need an IP Audit?
An IP Audit can prove invaluable in a variety of situations. It can be particularly useful in the following circumstances:
- Business need to identify/organise/record IPRs internally in a clear, consistent manner
- Potential upcoming assignments of IPRs
- Licensing or transfers of IPRs
- Mergers and/or acquisitions of businesses owning IPRs
- Rounds of investments into businesses owning IPRs
- Business expansion
- Restructuring of a wider group of companies
- Core business value and its future development based on IPRs (e.g.: creative/innovation-based businesses).
Identifying your IPRs can show their registration status and the resulting scope of their protection. IP Audit can also flag up which protected rights may be close to expiry or rights that may not have the adequate protection in place or no protection at all. This could leave you exposed to infringement and risk third parties taking unfair advantage of your IPRs. An IP Audit can include recommendations that will help minimise such risks.
Furthermore, addressing any issues identified as part of an IP Audit is a great way of reducing the risk of them arising at a later stage and becoming barriers in corporate and commercial transactions or leading to costly business disputes further down the line.
Depending on the scope of your instructions, an IP Audit can also help you identify current infringements of your IPRs by third parties or infringements of third-party IP rights occurring on your part, and take appropriate steps to rectify them.
It is also a very helpful exercise if you own a wider portfolio of IPRs but are uncertain in respect of its content and status, for example as a result of the relevant information and records not being kept centrally.
This, in turn, can give you the opportunity to see the real value of your IPRs and highlight ways of commercialising and maximising it. For example, your company may own IPRs that are not being currently used and opportunities for licensing, franchising or assignment could become an additional source of income for your business.
An IP Audit can include a variety of recommendations depending on the scope of the audit and the relevant factual circumstances.
After completion of an IP Audit, we can also assist you with carrying out certain recommendations included in it. It is worth noting that the governments in England and Wales offer a number of grants to businesses (subject to meeting eligibility criteria) which could cover the applicable audit fees in part or in full, depending on the scope of the relevant audit.
If you would like to find out more about IP Audit, please do not hesitate to contact Gosia Evans, Senior Associate (Commercial & IP Dispute Resolution).