In Tuesday’s blog post, entitled How to manage a patent portfolio, we referenced the importance of conducting a patent audit in order to better understand your patent assets, identify risks and opportunities in your portfolio, and monitor competitors. Today, we outline the basic steps in conducting an IP audit on your business and why this is important.
- Identify your IP: Determine what types of IP your company owns or is involved in (patents, trademarks, copyrights, trade secrets, etc.), and what agreements you have in place (licenses, assignments, non-disclosure agreements, etc.).
- Gather relevant documents: Collect all documents related to your IP, including registration documents, contracts, licensing agreements, and employee agreements. As a best practice, keep these documents organized and up-to-date at all times. This will minimize risk and streamline the IP audit process.
- Evaluate your IP assets: Review your IP assets and evaluate them based on their value, relevance, and strength. Identify which assets are core to the success of your business and which are not. The value of individual IP assets can change as your company’s priorities change so it is important to conduct audits periodically, for example, annually.
- Identify potential risks: Assess any potential risks associated with your IP portfolio, such as gaps in protection (e.g. expiring patents, lack of protection for new products, lack of protection in certain jurisdictions), infringement risks, invalidity risks, and licensing risks. Identify third party IP that could impact your freedom to operate and monitor your competitors.
- Review agreements: Review any agreements related to your IP assets, such as licensing agreements and joint venture agreements, to ensure that they are up to date and aligned with your business goals. Monitor important milestones, as well as renewal and expiry dates.
- Develop an IP strategy: Based on the results of the audit, develop a strategy for your IP assets that aligns with your business goals. This may include pursuing additional IP protection, entering into new agreements, enforcing your IP rights and/or rationalizing IP that is no longer core to your business. Plan to allocate your resources accordingly, focusing more time and money on core IP assets.
- Execute on your IP strategy: Use the results of the IP audit to make informed business decisions and execute on them. This may include things like expanding IP protection around products and markets that are core to the success of your business, licensing or selling IP assets that are no longer core to your business to generate additional revenue, entering into a new license arrangement to gain freedom to operate, or taking action against a potential infringer to protect your market share. Set a reminder to conduct your next IP audit as part of good corporate hygiene.
Overall, conducting regular IP audits can help you better understand and manage your IP assets, reduce risk, identify opportunities, and maximize the value of your intellectual property. Use of an intangible asset management (IAM) system can simplify the IP audit process and streamline due diligence.
Fortress IAM™ is an ‘all-in-one’ intangible asset management system designed specifically for innovative SMEs and their advisors to ensure sustained competitive advantage, revenue growth and higher valuations.