According to the legal definition, Intellectual Property (IP) Audit is a comprehensive review of a company's IP assets, related agreements, relevant policies and compliance.

 

Some of you might be wondering: "What is there to audit? We have one trademark, we know about it. That whole IP audit is not for us." However, did you know that almost one-third of the EU companies surveyed have no provision in their standard Employment Contract as to the ownership of IP? And yes, IP questions are relevant for many contractual relations.

 

Besides, the IP one has can be a dormant value, ready to be explored.

 

Did you know, for example, that since 1993 IBM has been making approximately one billion USD per year from licensing its non-core technologies? In plain language, they have identified what they own but do not need and then licensed it off to create an additional revenue stream. This is one potential outcome of an IP audit. Another one could be at least reducing costs of unused IP assets, but also discovering unclaimed business opportunities or exploring potential business expansion, or even tax deductions. Benefits are numerous.

 

Furthermore, it happens quite often that the IP rights owner is not right. Some IP rights might need to be transferred: be it from an employee, or from the company's retired co-founder, or perhaps from the previous business entity which changed its name and/or location.

 

Recently, we have also had several cases in connection with trademarks when the initial list of goods and services for which the trademark was registered, no longer reflected the business needs of our clients. One cannot expand the list of goods and services, however, in many cases, it makes sense to at least file for another trademark which would be better in line with the current (and future) business needs.

 

Business evolves, IP should evolve too.

 

While an IP Audit could mean a lot of different things, generally speaking, there are three "types" of an audit:

 

1. general-purpose IP audit, which is self-explanatory;
2. event-driven IP audit, e.g. in the context of M&A, or JV, or before engaging in IP licensing, or launching a new product (where an FTO - freedom-to-operate - could prevent quite some potential troubles), etc.) and finally,
3. limited purpose-focused IP audit, e.g. when preparing for litigation or foreign expansion/filings.

 

Whatever the "type", classical IP Audit focuses primarily on two business concerns:

1. does the company own all the IP it needs?
2. does the company infringe on the IP of others, while conducting its business?

 

The second one, namely the infringement question goes both ways, as it is important likewise to monitor that one's own rights are not infringed (and if so, act accordingly).

 

In any case, an IP audit allows a company to get a clear view of which IP assets the company owns, which ones it effectively uses, who and where owns these IP assets, and whether there is a real or potential infringement of either the company's IP assets or of the IP assets of others.

 

However, most importantly an IP Audit allows to answer the question:

which actions related to IP assets are required to best serve the relevant business goals of the company?

 

IP is an asset, and an asset needs to be put to use for the benefit of its owner. Yet, it all starts with taking a step back and performing a proper IP audit.

 

We at Starks have solid experience in all types of IP audits, as well as in the design and execution of IP strategies that best support business goals.

 

Contact us for the intake interview and let's discuss how we can help your business succeed.