Intellectual property is a vital part of a businesses’ bottom line. The reason? It’s where most of your company’s brain power goes, and that exact brain power used to build your business is what makes your business more and more valuable.
We’ve discussed this topic often here, so you may recall that intellectual property is everything from:
- Patents for features that make products more attractive or make processes and business methods more efficient
- Trademarks that protect names, logos, tag lines and symbols identifying a company
- Trade secrets that protect customer lists, vendor lists, designs, and methods
- Copyrights that protect original works, marketing materials, guides and manuals, audio-visual works, software, compilations, and artwork
- Design patents or trade dress that protect the way products look
While not every type of intellectual property will be important for every business, it’s without a doubt that some type of intellectual property is important to every business. That’s why businesses now recognize IP audits as essential for good intellectual property management and for showing the true value of your business.
What is an IP Audit?
An intellectual property audit is a systematic review of a company’s IP assets and related risks and opportunities. IP audits can help assess, preserve, and enhance IP; correct problems with you IP rights; make unused and unknown IP work for you; and identify risks where your company’s products or services may infringe another’s IP.
A comprehensive IP audit reviews not just your business’s IP assets, but also your IP-related agreements, policies and procedures, and even your competitors’ intellectual property.
Why Are IP Audits Crucial for a small business?
IP audits help companies get ahead in the following ways:
√ Identify what IP your business has
√ Preserve and enhance the value of your existing IP
√ Identify new opportunities to profit from IP
√ Identify roadblocks and prevent costly disputes and infringement
√ Improve business transactions
Since IP rights are centered around intellectual property law, IP audits are typically conducted by a lawyer who has a broad range of experience with various types of IP (such as trademarks, copyrights, and patents), and IP valuation.
When Would Your Business Need an IP Audit?
General purpose audits help start-ups and established companies discover, document and protect their IP, in addition to identifying new opportunities and potential risks.
IP audits are also done when a business needs to:
- Assess the impact and potential value of obtaining or licensing IP
- Assess IP rights and risks of buying or launching of a new product or service
- Identify risks of adopting a new trademark or new product claims and warranties
- Assess the impact of a key employee’s or partner’s departure on IP rights and value
- Assess a third party’s infringement claims and possible consequences
- Show a company’s value to obtain or provide financing or investment capital
- Demonstrate company value in preparation for a merger, joint venture, or sale
Intellectual property is used by businesses of all sizes, and is becoming one of the most important aspects of a business. Law in the U.S. lets businesses leverage their intellectual property to gain an advantage, so companies that understand their IP and how to use it will be many steps ahead of competitors that don’t.
A good lawyer can help you strategize about how to address an IP audit for your unique business — and building a relationship with a good lawyer early on can be extremely helpful so you have someone on your side to advocate for you and protect you.