Binh Rey, one of our Trade Mark Attorney Associates has been published on Side Door, award winning marketing agency based in Melbourne, website and newsletter!
Despite its intangibility, intellectual property (IP) often comprises the largest portion of a company’s overall value and in many cases is the most important asset a business has. All IP that a company owns must be accounted for in order to derive the maximum commercial advantage. It is important to manage the IP portfolio of a business in the same way as cash flow, production inventory and equipment, and the first step in managing IP is by identifying it. Keeping track of one’s IP inventory through an IP audit is crucial in developing informed business strategies and making substantial business decisions. In a nutshell, the aim of an IP audit is to distill all manner of intangible assets, such as inventions, brands, trade dress, production techniques, trade secrets (e.g. formulas, methods or processes) and others such into measurable, valuable and manageable forms that can be protected and utilised for the benefit of the company.
An IP audit is a process that involves systematically reviewing and listing all forms of IP that a company owns. The results of an IP audit help companies in a number of ways: to keep track of the status of their IP, identify registered IP which requires renewing, account for outstanding royalties receivable through licensing their IP, ensure that ownership and assignment of IP are properly formalised (necessary to maintain valid rights and for enforcement), and to compile other documentation required to exploit the company’s IP rights. With the information provided by an audit, the company can determine which of the IP in its portfolio would provide the greatest value through licensing agreements, which IP may be exposed if it were to be challenged, which IP is most critical to protect and/or maintain for the purposes of enforcement, and assist with making other strategic decisions.
Through IP audits, risks or lost opportunities arising from the following situations can be addressed:
During IP audits, IP can be identified to fall under two classifications, namely, registered and unregistered IP rights. Registered IP is that which requires registration and grant to a governing body to be able to be defended or enforced. An application is submitted to the respective office in IP Australia, which then conducts an examination and subsequently grants or rejects the application. On the other hand, unregistered IP is that which automatically exists upon creation.
Registered IP includes:
Unregistered IP includes:
Other forms of IP, or documents managing IP, that should be identified in an IP audit include:
Other vital information that can be obtained when conducting IP audits is the ownership of all IP in the company’s portfolio. Ownership of the intellectual property should be established and the information should be in order and readily available because enforcement of those IP rights generally depends on ownership being held by the right party.
The owners of IP should be identified and may be any among the following:
Ideally, IP audits should be conducted regularly (e.g. every year) so that information is kept up to date. This is necessary for effective strategic planning and to optimise the company’s gains from their IP. At the minimum, however, IP audits should be conducted in the following scenarios:
A comprehensive IP audit requires a carefully established audit team. An IP audit team should be composed of individuals from different departments of the company, such as management, research and development, technology, and marketing. The presence of an IP attorney in the team is invaluable. Baxter IP, Patent and Trade Mark Attorneys can see untapped IP prospects in a business and the potential business opportunities arising from these assets.
An IP audit conducted by a team without an IP attorney having a strong knowledge of intellectual property law, may result in missed opportunities for IP protection and potential revenue through licensing or franchising and have significant commercial or financial consequences in the event of IP infringement. An accountant or a bookkeeper, or preferably an IP valuation expert, is another critical team member who can help the IP attorney put a value on the IP.
Baxter IP is able to conduct a full-scope IP audit including a complete assessment of all relevant IP and IP related materials, or alternatively, narrow the scope to particular types of IP or materials, depending on your company’s focus.
We are able to work independently, or as part of a broader Audit team, to provide a tailored IP Audit package to suit your company’s needs. Get in touch with one of our IP Audit specialists, or equivalent.