In this article, we’ll go through the stages that must be followed to accomplish an audit. Business valuators have long known that intellectual property accounts for 75 percent of the value of a company’s saleable assets in the twenty-first century. As a result, IP auditing is a crucial management tool.
Intellectual Property Identification
The initial goal is to identify relevant IPs, such as inventions, trademarks, copyrighted material, designs, know-how, and confidential information. Include any licenses and other royalty arrangements given to or by the company. Outside lawyers and valuation specialists may be better suited to handle the abilities and time necessary for this phase in most circumstances.
Existing Registrations and Pending Applications
The next step is to see if the IP that has been found has any existing registrations or protection and if so if they are current and in good standing. It will be simpler to identify whether registrations or pending applications exist in certain circumstances than in others.
Unprotected IP
Following the processes outlined above, IP that has not been protected but is still a valuable company asset may be identified. The scope of the right to utilize and exploit such IP, as well as the right to prevent others from doing so, should be evaluated. It’s also worth thinking about how to keep it safe. In the absence of a copyright assignment, for example, if the company has invested significant time and effort in having third-party developers produce software for it, there may be some issues.
Corporate operations or physical security should be taken into account while deterring IP theft or abuse. Computerized files are an ideal subject for such protections. Are passwords, electronic audit trails, or copying limitations in place? Confidential information and know-how, as well as how they are secured, should be given more thought.
Contracts with employees, third-party consultant agreements, and joint venture agreements should all be taken into account. Do they have provisions in place to protect the company’s intellectual property, such as confidentiality, non-disclosure, and ownership interest transfer to the company?
Identify Infringements That Might Exist
If processes or other unregistered IP rights are being used, it must be determined if they are permitted to use. If third parties become aware of the usage of the IP in question, there may be concerns with possible infringement claims.
Valuation
Finally, once all of these difficulties have been resolved, itemizing and valuing the different pieces of IP should be considered. By operating in this manner, a deeper understanding of the company’s value may be acquired.
Making Smarter Strategic Decisions
An IP audit should lead to improved strategic decisions on how to allocate limited management time and company assets. Risks of infringing on others’ intellectual property can be identified before they become an issue. IP audits may potentially discover new business prospects through licensing or other forms of monetization.
The list of Global IP Firms can be found here.