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Intellectual Property (IP) rights are increasingly the most valuable and effective tool for businesses in today’s demanding and competitive commercial environment in the UK. Intellectual property refers to intellectual assets, ideas, patents, trademarks, copyright etc. The proper administration of IP rights provides a launchpad for a firm to get ahead. Conducting IP Audits is thus necessary to create a successful and efficient Intellectual Property Asset Management System and to evaluate the company’s current and future intellectual assets. These audits would provide information and recommendations for a methodical approach to the management, protection, and use of intellectual property.
What Is An IP Audit?
An Intellectual Property Audit program in the UK identifies IP assets, evaluates their legal status and valuation, and identifies methods for protecting and monetising the said assets. It is a systematic, exhaustive, and solution-focused evaluation of the IP that a UK business owns, utilises, or acquires. An IP Audit can be made to measure to business’ unique requirements, and it often has two main goals:
- To foresee and manage risks associated with a business’s IP portfolio and
- To allow informed business decisions to be made in relation to IP strategies that help maintain and improve its competitive position in the relevant markets. – You can read more about it in our previous blog.
Is an IP Audit necessary?
It can be an uphill battle for businesses in the UK that are not experienced in the complex IP laws to effectively identify and employ their intangible IP assets as a tool: to achieve their goals, establish a space in the market, and maximise the business’s value, growth, and success.
An IP Audit can assist in achieving business objectives such as:
- Recognising and keeping track of the company’s IP assets
- Enhancing the company’s IP asset security
- Increasing both current and future value
- Erecting a functional IP administrative framework
- Estimating the current and future value of IP assets
- Identifying and managing possible dangers in the future.
- Identifying and fixing any issues with the IP chain of titles
- Encourage innovation and creativity
- Designing a plan to provide protection in important markets
- Identifying the IP-related advantages, disadvantages, strengths, and dangers.
- Creating a plan to increase the value of IP assets leading up to a future sale, merger, acquisition, growth, financing, capitalisation, or liquidity event.
- Cutting expenses
What are the types of IP Audits?
There is no “one size fits all” approach when it comes to IP Audits. This is because they are customised to the unique requirements and goals of a firm, but they may typically be divided into three groups: (1) General-Purpose IP Audit, (2) Event-Driven IP Audit, (3) Limited-Purpose IP Audit.
New businesses or those thinking about establishing new IP rules, standards, or processes employ this widest sort of IP Audit.
It is also appropriate for businesses making significant organisational changes, such as new marketing strategies.
The term “IP due diligence” is another name for this kind of examination. It’s used to evaluate the risks and value propositions of a company’s intellectual property assets. Event-driven auditing is frequently used before engaging in a financial deal involving IP (such as an initial public offering), when introducing a new service or product, when thinking about IP licensing, and in situations including bankruptcy and layoffs.
The scope of this IP Audit is the smallest one. It is contextual in type and frequently utilised to support a legal stance or the estimation of a specific intellectual property asset. It can be used in situations like overseas IP filings, engaging in e-commerce, avoiding infringing on third-party copyright content, litigation planning, and IP Law changes.
How to prepare for an IP Audit
It is crucial to establish clarity about the audit’s goals, available resources, and strategy before starting the audit process.
Making sure you understand the goal of the IP Audit is the very first step in planning one. This entails deciding the audit’s type and relevance as well as its time and financial budget. The execution of the audit and its result will be significantly impacted by these decisions.
Compile as much necessary data as you can about your IP assets’ relationships to internal and external relationships, your business plan, other assets, your present IP management position, any ongoing IP issues, and connections to your company’s finance.
An audit plan outlines the business areas that will be examined, the audit’s scope, the time frame, the budget, the duties and assignments of the team, and the format of the final report.
The likelihood of omitting one or more important phases in the auditing is reduced by a thorough checklist. Every checklist is customised to the kind, size, location, and audit scope of each particular organisation. Every individual on the audit team will utilise the checklist.
Any agreements that might significantly affect intellectual property should contain adequate, relevant clauses that can be identified and evaluated. These cover contracts for R&D funding, employees and contract workers, joint ventures and partnerships, licensing, and projects.
How to Carry Out an IP Audit
The required preparatory stages are followed by four primary processes that make up the IP asset audit:
The first phase entails a straightforward inventory activity where all intangible assets are listed, and each is given a brief description. This highlights any discrepancies in the utilisation of these assets and specifies how they are being used.
This phase involves determining if all the assets included in the inventory are, in fact, held by your business and, if not, by whom. Where you have ownership of assets, the next step is to determine the kind of ownership (sole, shared, licenced, etc.).
In this stage, you collect information on any assets that your company owns that may be vulnerable to infringement by third parties, as well as any assets that your company does not own but that may be violating the rights of other parties.
Plan of Protection
This stage highlights possible changes to policies, procedures, and IP management practices and discloses any flaws in the legal, regulatory, and administrative processes associated with the management of IP assets.
What to Do After the IP Audit?
The next step is to weigh the advantages and disadvantages of obtaining IP rights for the assets you have identified.
Protect your IP to protect your business and take action in areas of the market you want to dominate. Once you’ve secured IP rights in the UK, you’ll need to keep an eye on and strategically employ these assets to further your business’s larger commercial goals. This should be supplemented by routinely reviewing trademark and patent databases to keep yourself updated on the actions of rivals and other relevant parties.
At Start.Biz, we help make IP audits a complete breeze and position businesses for success. So, get in touch with us today for all your IP needs and let’s take your business to the next level!
An Intellectual Property audit program identifies IP assets, evaluates their legal status and valuation, and identifies methods for protecting and monetising the said assets.
Conducting IP Audits is necessary to create a successful and efficient Intellectual Property Asset Management System and to evaluate the company’s current and future intellectual assets.
An IP Audit helps identify and assess IP assets and foresee and manage risks associated with a business’s IP portfolio.
IP Audits are of three types: (1) General-Purpose IP Audit, (2) Event-Driven IP Audit, (3) Limited-Purpose IP Audit.
In preparing for the IP Audit, the first step is to understand the goal of the IP Audit. This is followed by researching relevant data about the IP assets, a plan about the audit’s scope, timeframe, and budget, and lastly, contracts that cover things like funding, licensing, R&D etc.
There are four primary processes to carry out an IP Audit. These include listing the assets as part of the inventory, determining the ownership of each asset, checking for infringement, and finally, planning for protection by addressing the management of IP assets.
After completion of the IP Audit, the next step is to weigh the advantages and disadvantages of obtaining IP rights for the assets you have identified.