By: John McKeown & Ruth Corbin
It is now well established that the most valuable assets of a 21st century business consist of its intellectual property, including its trade marks, copyrights, patents or confidential information. An IP audit helps in identifying, protecting and managing these assets.
In broad terms, an IP audit is conducted to identify the company’s IP assets and ensure that the assets are being appropriately protected, managed and valued. An audit is a useful management tool at any time, but may be prompted by a significant financing, the recognition that IP assets are not sufficiently protected, or a recognized management need to develop strategies that will maintain and improve the company’s market position.
In order to carry out an IP Audit, a systematic review is conducted of the IP assets owned, licensed or used by a business. In many cases it will be found that some of those assets are not protected appropriately and are also under-utilized. An assessment may also reveal whether a business’s current activities infringe the rights of third parties.
In some cases businesses lack the necessary resources to undertake a complete and exhaustive audit. In such cases, the review can be more limited. But the need to do one cannot be safely ignored.
The IP Audit process can also determine the value of IP assets. Financial value provides a signal for how to manage various IP assets in the future. As it is said, if you don’t measure it, you can’t manage it.
Once the audit has been completed a strategy can be developed to ensure that IP assets are appropriately protected and utilized. For example, if the company’s primary asset is confidential information and know-how, then essential steps should be taken to ensure that such material is protected within the company and in the hands of business associates, suppliers and customers.
Frequently businesses lose sight of how important their intellectual property is or they may never have developed an appreciation of it in the first place. Trade marks are a case in point. For a company selling its goods in association with a trade mark, the trade mark may be the key asset of the business. It needs to be registered, used and monitored for potential infringements. Registration and continuous monitoring give a company more freedom and ease in protecting and leveraging its trade marks. IP Audits are more than just legal or financial exercises. In some instances business and marketplace input concerning brand management or valuation of IP assets may be required. We are well positioned to co-ordinate such input.
This is just a very brief overview of the IP Audit process. Every business should consider implementing one.
John McKeown
Goldman Sloan Nash & Haber LLP
480 University Avenue, Suite 1600
Toronto, Ontario M5G 1V2
Direct Line: (416) 597-3371
Fax: (416) 597-3370
Email: mckeown@gsnh.com
Ruth M. Corbin
CorbinPartners Inc.
Dr. Ruth M. Corbin is Chair of CorbinPartners Inc. and Adjunct Professor at Osgoode Hall Law School. CorbinPartners customizes IP Audit documents to industry, government and education sectors, and develops benchmarks for assessing the marketplace value of IP assets.
These comments are of a general nature and not intended to provide legal advice as individual situations will differ and should be discussed with a lawyer.