When properly developed, managed and protected, intellectual Property (IP) is an extremely important and valuable asset of any business. However, if done haphazardly, the result can be costly and damaging.
There’s nothing worse than just getting out of the gate with your business, only to receive a stern Cease & Desist letter from an attorney demanding that you to stop using your trademark because it infringes his client’s mark. We see it all the time. The scenario is equally applicable to other areas of intellectual property, including, patents, trademarks, trade secrets and copyrights.
The cost in time and money for a business (particularly a new one) to re-tool can be enormous and potentially devastating andlikely could have been avoided had the business owner first sought the opinion and counsel of an experienced intellectual property attorney, The attorney will review the business plan, identify and evaluate the intellectual property interests and potential problems. The attorney will then advise the business owner of these issues and propose a corrective plan of action.
What is an IP Audit? Simply put, an IP Audit is a systematic review of the intellectual properties owned, used or acquired by a business so as to assess and manage risk, remedy problems and implement best practices in IP asset management. Nowadays, an IP Audit is an indispensable tool for successfully managing knowledge‐driven business by aiding the process of creating or revising its IP strategy.
When is it Needed? Although there are three types of IP audits for specific purposes, the most important one for purposes of this article is the “general” or “broad” audit. It is done in the following types of contexts: (1) before establishing a new company it is always important that the start-up company be aware of intellectual property or “intangible assets” in owns or needs to protect., (2) when a business is considering implementing new policies, standards, or procedures relating to IP, (3) when a business is considering implementing a new marketing approach or direction, or is planning a major reorganization of the company, and (4) when a new person becomes responsible for IP management.
What is the Process? A properly-conducted general or broad IP audit should conform to this basic structure:
- Identify the Relevant Intellectual Property: Trademarks, Domain Names, Copyrights, Trade Secrets, Patents, Industrial Designs, Know-how, Other Confidential or Proprietary Information
- Confirm Ownership of the Relevant Intellectual Property: Licenses to Third Parties? Possible Assignments of IP to Third Parties? Paper trail?
- Assess Methods of Protecting the IP: Trademark registration (federal, state, foreign), copyright registration (federal, foreign), Patents (federal, foreign), Trade Secrets & confidential information (non-disclosure agreements, internal mechanisms for maintaining confidentiality), Public Notices (trademarks, copyrights
- IP Analysis and Valuation: Determine if the IP is relevant to your business strategy – essential and useful to your business, valuable to your business or to another business or person, not valuable to your business or to another business or person, licensing of technology, co-branding opportunities.
- Use of IP Audit to Prepare IP Management Strategy: Optimising IP Assets, determine which IP Assets should be further developed, IP monitoring plan, cease and desist letters to infringers, litigation (federal, state, foreign), risk identification and mitigation
Finally, the cost: You can expect to pay a minimum of $1,350.00 for a small business IP audit, that also serves as a game plan for future business development. However, the cost is based on hourly rate, so naturally, the larger the business, the more the IP, the more time spent = higher the cost.
In the end, You will save yourself money and stress by doing this the right way. Once you and your attorney are satisfied that your branding and products are different than that of the competition, you need to protect yourself, otherwise you won’t gain a monopoly on the hard work that you have accomplished so far. For instance, you will likely need trade secret protection, copyright and/or trademark protection and possibly patent protection. After all of your hard work and development, you don’t want to unknowingly share inside information with your competition.
If you need help identifying your businesses’ valuable IP, please call or email my office to set up an appointment. We offer consultations both in office and via teleconference. For budgeting purposes, our clients appreciate that we can usually set a flat rate for these services based on the information obtained during the initial consultation. The cost for a 1 hour+ consultation is $100 and is applied toward the flat fee for the IP Audit.