Because of a growing trend of IP awareness, businesses are becoming increasingly cautious in protecting their intellectual property. A corporation now works for effective and timely registration of IPs. They are not willing to take any risks with their IPs because it is the IP that generates revenue for them.
With massive technology interventions, intangible assets have become more important. Companies are depending more on their intangible assets and concentrating on improving their competitiveness. More due diligence is required as the reliance on those assets grows. There are a variety of methods that a corporation can utilize to protect its intellectual property from infringement. A regular check on IPs, being aware of critical IP rights, and keeping track of intangible assets are just a few of the things that the company must do.
IP Audit is one method for conducting a systematic examination of the company’s IP assets. What is the purpose of an IP audit? In simple terms, an IP audit is the process of examining a company’s intellectual property holdings. Although this may appear to be a simple operation, it contains facts that the organization may not be aware of. IP auditing is more than just a systematic review; it also gives valuable competitive data in the field in which the IP operates.
This type of analysis always aids the organization in addressing its intangible assets and strategizing further if needed. As previously stated, an IP audit provides a comparative insight of how effectively a company’s IP performs in the market. The majority of the time, the corporation is unaware of the IP it possesses until the IP audit. With the use of competition data, the company has a better understanding of its IP’s strengths and limitations.
The corporation can decide whether it needs to acquire any intellectual property or develop its own depending on its core technology. The audit report can be used to make decisions about licensing and joint ventures. Therefore, one can easily comprehend that IP audit can prove to be a major factor for maximizing business opportunity and increasing profit margin.
Importance of intellectual property audits for corporates
The first and most essential benefit is the evaluation of the company’s IP, which provides a strong report on whether or not the company’s strategic objectives have been realized. If the company’s goals aren’t met, it may adjust its work or approach. Another goal of IP auditing is to create a solid division of techniques, strategies, and products that benefit the company’s profitability. The company can select which assets are useless and which are essential to the company’s survival. The company can determine how to structure asset management and evaluate it based on that. As a result, the outcome of an IP audit aids in the organization of IP evaluation.
Conducting an IP audit assists in determining the benefits that an IP can provide depending on its market evaluation. The worth of an asset might fluctuate greatly depending on market conditions, and this audit can assist in determining the same. If the IP assets do not meet market needs, or if the royalties paid do not meet market needs, the corporation can choose a different strategy.
With the importance of business objectives increasing, there is a significant need to link IP management with the business model. This alignment can be structured with the help of IP Audit. The evaluation of IP and its relevance is a top priority, and IP audit accomplishes this. The value of IP assets in the market and how the company uses them play a big role in the alignment.
As a result, this IP audit achieves its goal. Without a doubt, the results of an IP audit can assist the company in adding a new dimension to its strategy, resulting in a better market position. The company must select when to do the IP audit. The audit can be requested in a variety of ways by the company in question. Some of the examples are, a) during merger and acquisition or joint venture b) for ascertaining the valuation of IP c) for the personal use of the company d) in case of violation of any third party rights e) yearly scrutiny of IP, etc.
Depending on the reason for the audit, there are several distinct types of IP audits. A General Purpose Audit, as the name implies, is performed by the corporation as part of standard operating procedure, either yearly or quarterly, depending on the need and circumstances. A Special Purpose Audit, also known as an event-driven IP audit, is carried out for a specific purpose. For example, if a company is considering forming a joint venture or merging with another company, an event-driven audit can be performed to determine the company’s value. Lastly, the audit can be internal where the company conducts internally through its internal team and resources, or it can be external, where the company can outsource the audit, generally to an IP firm or other professionals.
You can see a list of International IP firms here.