Identify, Organize, Review and Quantify the value of the existing IP portfolio within your company
As our client’s companies grow it is important that they analyze their Intellectual Property (IP) to determine what IP is known/unknown and protected/unprotected. In today’s marketplace IP is the fastest growing asset of a company and often times the most stable asset a company can have. In the last 20 years the market has assigned a vastly greater importance and value in IP. By not recognizing the true value of the IP or by not even recognizing that a company has IP, the company is not fully prepared to leverage its IP for additional revenue or to reduce unnecessary IP costs. IPC utilizes the IP Audit to assist our clients in detailing the IP and the other intangible assets so that our clients can effectively compete in today’s global marketplace. Our clients are often in the process of a Merger or Buy-Out and our IP Audits can effectively assist our clients in the evaluation process.
What is Intellectual Property (IP):
Intellectual property is one of the most important assets belonging to a company. IP affords certain ownership and distribution rights to the owner:
Copyright: A copyright exists in creative and artistic works (movies, music, websites, software, photos and books) and the owner of the copyright gets exclusive distribution rights for a period of time. Copyright vests in the creator at the moment the expression is fixed in a tangible medium.
Patent: A patent is the exclusive right to prevent another from making, using or selling an invention. An invention is a novel, non-obvious composition of matter, article of manufacture or process.
Trademark: A trademark is a distinctive sign, logo, brand name or trade dress which identifies the source of the good or service. They serve not only the purpose of protecting the investment of the trademark owner in his or her brand but they also protect consumers from confusion as to the source of various goods and services.
Trade Secret: A trade secret is secret, proprietary or confidential information concerning specific commercial knowledge of a business. The can include customer lists, formulation, specific business process or marketing/business plans.
What is an IP Audit?
An IP audit is a systematic approach of analyzing what IP a company has, what IP is known/unknown and what IP is protected/unprotected. The purpose of the audit is to clearly establish the value known, the attainable value and more important what the company should be doing to further protect itself to allow the true value of the IP to grow. The more often an audit is conducted the greater the resources a company has in global competition. The results of an IP audit allow our clients to organize all of the IP, determine important dates and costs associated with maintenance and more importantly begin the process of extracting the true value of their IP.
The basic steps to the audit are:
- - Determine the scope of the audit with the client
- - What does the client need, what are the clients goals and how aggressive does the client want to be
- - Identify
- • The protected IP (trademarks, copyrights, patents and trade secrets)
- + Gather all the documents (applications, registrations, customer lists etc.)
- + The unknown/unprotected IP that has value to the company
- + Evaluate and determine the cost/benefit for seeking protection of this IP
- • The known/unprotected IP that has value to the company
- - Process the IP and analyze all contracts the client has pertaining to IP
- • Verify IP is protected
- • Verify royalty payments are made
- - Evaluate the true value and strength of the IP and determine which IP will be protected and for what value
- - Record and retain all information of the audit
- - Map a plan to reach the goals of the audit
Benefits of an IP Audit:
The IP audit will bring together different departments of a company and will provide them with valuable information about the company, the brand, the products or services and the overall growth of the company. The audit will allow management to determine where the valuable assets are, how they are protected and what needs to be done to assure the continued protection and more importantly possible exploitation of the intangible asset to increase revenue.
By identifying, organizing, reviewing and quantifying the value of the existing IP portfolio or potential IP portfolio, companies can resolve any current and future IP management issues and most importantly add value to its bottom line. Management issues which an audit will assist with are mergers, acquisitions, seeking of additional funding and a purchase or sale of a company. The IP audit will provide the company with a value based on the IP portion of its asset and therefore providing an accurate value to the company as a whole and avoiding the risk of under-valuations. Without an IP audit a good company cannot become a great company.