Uncovering IP Risks and Potential: IP Audit

IP can drive value for your business, from delivering competitive advantages to creating revenue streams. Knowing what IP you have and its strategic importance to your business is an important step in realizing the potential of these assets. An IP audit is a first step towards making these assets work for you.

While using IP strategically can have tremendous benefits for your business, using the IP of others without permission can have devastating consequences. An IP audit can also reveal vulnerabilities for your business, that could ultimately lead to pulling your offerings from the market or paying damages to a third party.

You can use WIPO’s IP Diagnostic tool to support the process. At some stage, a professional support can be helpful to reveal hidden risks and potential. You can use the information you learn to build an IP strategy, create new revenue streams, or reduce risk to your business.

What you learn in an IP audit

An IP audit reviews the IP owned and used by your business. During an audit you can:

Identify existing and potential IP assets
Identify coverage and gaps in protecting your IP assets
Make sure you actually own the IP assets that are strategic to your business
Uncover unused assets that cost your business money
Identify under-utilized assets that can help you generate revenue
Identify IP assets of third parties you might be using that create risk for your business

Five moments to think about an IP audit

1. When setting business strategy or reorganizing

2. Before working with investors and lenders

3. Before working with acquirers, or partners

4. Looking to cut costs or build revenue

5. Preparing for licensing or litigation

Getting ready for an IP audit

Keeping in mind the purpose of the IP audit, you can start the process by gathering information, such as:

Your company’s IP policies and strategies if they exist
Standard agreements that may have an IP component, like employment and non-disclosure agreements and supplier arrangements
A list of key employees creating IP assets and their employment agreements
A list of personnel managing IP assets
A list of IP assets you own and related documentation, including:
- registered assets like copyrights, domain names, industrial designs, patents, utility models and trademarks
- other unregistered assets like software, trade secrets, and unregistered copyrights
Contracts that might have IP provisions, like suppliers, licenses to IP and software, customer and partnership agreements, research arrangements, etc.
A description of any IP related disputes

Carrying out an IP audit

Depending on the purpose of the IP audit and available budget, some of the following analyses may take place:

Inventory

Ownership and other rights

Who’s using your IP?

Third party IP

IP Valuation

Policy review

After an IP audit

An IP audit helps you understand your company’s IP assets and their potential. It should also identify IP related risks. But the audit is only the first step. Following the audit, make sure your approach to IP matches your company’s commercial objectives.

Remember, IP can change in value as technology and business contexts change. Conducting regular IP audits play an important role in making these assets work for your business.