The Importance of Audits on Intellectual Property Risks is Present if the Audits aren’t Done

An intellectual property audit examines the company’s IP assets, as well as the associated threats and possibilities. IP audits are a great way to analyze, safeguard, and even enhance IP and fix any deficiencies in IP rights and put unusable IP to use; identify the possibility that a company’s product or services infringe on the rights of another’s IP, and follow the best practices designed to improve IP Asset Management. 

An extensive IP audit is a comprehensive examination of the company’s IP assets, as well as agreements related to IP as well as policies and procedures as well as competitors’ IP. As a business, we are concerned about the following issues:

  • Innovation and Intellectual Property
  • Protection of an Idea
  • Lawyers who protect inventions
  • Invention patent
  • Be sure to protect your innovations
  • Patenting your invention
  • Patent protection
  • Patent analytics
  • Patent licensing
  • Patent landscape
  • Protection of your product

Intellectual property-specific audits are initiated by a business’s need to:

Consider the potential impact and worth of selling or acquiring IP or licensing IP out of the country;

  • Review IP rights and risks that could arise from the launch or acquisition of an innovative product or service;
  • Examine IP rights and the risks when expanding into new market or trade channels;
  • Verify that licensees comply to the terms of the license;
  • Assist in ensuring that the R&D plan is developed to maximize potential business opportunities in the future;
  • Be aware of the risks that come with using a brand name that is not in use or a new claim on a product warranties;
  • Evaluate the strength and integrity of trade secret protection protocols and agreements
  • Examine the effect of the departure of a key employee in terms of IP rights and value
  • Review a third party’s infringement claims and the potential implications;
  • Examine and address the implications of termination of IP rights;
  • Examine and address the implications of a change in the case of a opponent’s IP rights;
  • Show the value of the company’s assets to get or offer financing or investment capital or
  • Show the value of your company in preparation for an acquisition, combination, joint venture or selling.

What is the reason Audits of Intellectual Property important?

Intellectual Property audits aid businesses to get ahead by implementing the following methods:

1. They determine what IP is owned by whom. 

A successful business is managed effectively. Intellectual property is a part of the business model and requires equipment, management inventory, inventory, as well as accounts receivable. 

If a company is not aware about its intellectual property it is unable to manage that property, and also protect against loss or damage. That’s the primary benefit in the IP audit … to inform the business about the intellectual property that it owns to help it take decisions regarding the protection of the IP, its growth, and the exploitation.

2. They help preserve and improve the value of the existing IP. 

Still, companies can make mistakes that can damage or diminish the IP security. On the other hand formal patent applications should be filed in order to safeguard inventions through a patent, and designs of products by the design patent. Patent rights can be lost forever when a business fails to properly handle the application or invention.

A thorough audit will identify these issues as well as additional actions that could be taken to prevent the risk of IP loss and increase the value of an organization’s existing IP.

3. Audits uncover opportunities to earn money out of IP. 

Many non-IP lawyers and businesspeople aren’t aware of the distinction between trademarks, patents, and copyrights, or whether their businesses own these kinds of IP. 

Most do not understand the amount of ingenuity required for obtaining an U.S. patent otherwise the kinds of things that could be protected by patents, the amount of rights and restrictions granted through patents, as well as the high IP value that is granted by design patents, in alongside copyright registrations and what they cover. 

They do not realize that new opportunities in commercialization in international and domestic markets can be tapped through IP licenses. The efforts of their competitors to acquire IP could be tracked and, in some cases, prevented.

Another benefit for the IP inspection is that educates decision-makers and innovators, as well as marketers, in regards to IP and actively safeguards IP opportunities prior to becoming lost.

4. They detect obstacles and avoid costly disputes.

A thorough audit could reveal the need for a freedom-to-operate study that identifies competing intellectual property rights that conflict with competitors’ rights, in addition to alternatives like creating around, licensing, or otherwise in anonymity, challenging the rights of competitors. 

Audits can reveal weaknesses in the audited firm’s intellectual property rights which could be remedied with actions, which will result in greater legal rights which will be less likely to be challenged once those rights are used.

5. They help and improve transactions in business

IP has been more prominently featured in business transactions since the boom in dot-com technology of the 1990s. This is particularly true for patents. 

The financial value of IP is estimated using economic and accounting methods which include analyzing the costs associated with developing new technology, calculating the amount of profit generated through IP-protected features, as well as determining the amount of royalties paid by third parties to the same IP assets. 

Since an IP audit provides a business with an accurate awareness about its IP assets and the value they are estimated to have and value, the owners are better equipped to handle any situations that may arise like an offer from a third party to purchase the company , or a fresh expansion or sales possibility that requires financing.

The risk is that if an audit of intellectual property had not been conducted the above procedures cannot be performed.

When conducting audits of intellectual property the following types of information that are helpful are often identified as follows:

  • The valuable features of a process or product which could be patentable, but are not yet patented;
  • Correctable defects in existing patents;
  • Employee agreements that were not properly signed and insufficient that could have led to competitors having ability to gain trade secrets
  • Trademarks that are essential to company identities were not properly protected from copying
  • Product configurations that are however not yet covered by design patents
  • Royalties for trademarks and patents were being paid according to conditions that were not being heeded;
  • Notifying the trademark, patent and copyright, which limited the ability of the company to apply IP rights and to claim damages and
  • Opportunities to license IP in the new markets and trade channels.
  • IP audits have produced quantifiable benefits for several companies, including the payment to the tune of billions of dollars in exchange for the use of patentable technology that was never considered patentable.

The risk is that if an intellectual property audit was not carried out, the information above would not be uncovered.

Conclusion

Importance of Intellectual Property Audits

IP audits may be general in nature or specialized to a specific kind of IP. General-purpose audits assist start-ups, as well as established businesses, in assessing and safeguarding their IP and helping identify IP development requirements as well as risks, opportunities, and needs. There are a variety of risks that could be posed in the absence of an intellectual property audit performed. As a business, we are concerned about the following:

  • Innovation and Intellectual Property
  • Protection of an Idea
  • Lawyers who protect inventions
  • Invention patent
  • Make sure you protect your invention
  • Patenting your invention
  • Patent protection
  • Patent analytics
  • Patent licensing
  • Patent landscape
  • Protection of your product
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