Every year, Nokia’s IP licensing division brings in a consistent $600 million in royalties. Motorola received fortunes worth $12.5 billion because Google acquired the rights for its Mobility technology.
For effective commercial appropriation of such assets, a complete evaluation of the enterprise’s intellectual property assets with the goal of assessing their legal status, economic potential and strategic value is necessary. The term “IP Audit” often refers to this methodical assessment procedure. IP auditing means analyzing or evaluating an organization’s intellectual property. Comprehensively, “A systematic review of a business’s owned IP, utilities, or acquired in order to assess and manage risk, correct flaws and implement best practices in IP asset management”
IP audits are mainly conducted
- To determine the company’s intangible assets and further grow in value.
- When a company is contemplating a joint venture or merger and must estimate its worth
Depending on the cause of the audit, there are many types of IP audits. A General-Purpose Audit, as the name suggests, is undertaken by the organization as part of routine practice, either annually or quarterly, depending on the need and circumstances. A Special Reason Audit, also known as an Event-driven IP audit, is carried out with a specific goal in mind. IP auditing is a useful technique for tracking an organization’s intellectual assets and intellectual property (IP) that it owns, uses, licenses in or licenses out, or acquires.
A good audit is essential for an organization’s internal examination and modification of its IP strategy and policy. Furthermore, during the course of an audit, the auditing team is likely to discover potential areas of disagreement with third parties.
Stages of IP audits
Inventory – The first phase entails a straightforward inventory activity in which all of your intangible assets are listed and each is given a brief description. This highlights any discrepancies in the utilization of these assets and specifies how they are being used.
Ownership: In this phase, you ascertain whether your business owns all the assets included in the inventory and, if not, who does. Who own assets determines the kind of ownership (sole, joint, licensed, etc.).
Validity Check – In this phase, you verify that each registered IP asset is active and has not expired. The validity of the IP asset is important to claim the ownership. This stage will determine if the owned asset needs to be renewed.
Infringement check – In this stage, you gather information on any assets that your company owns that may be vulnerable to infringement by third parties as well as any assets that your company does not own but that may be violating the rights of other parties. Any litigation, in process or pending are highlighted in IP audit which helps to decide next step in regard to that asset.
Plan of protection – This stage highlights possible changes to policies, procedures and IP management practices and discloses any flaws in the legal, regulatory and administrative processes associated to the management of IP assets.
The Benefits of IP Audits –
The first and most important benefit is the evaluation of the company’s intellectual property (IP), which offers a reliable report on whether the company’s strategic objectives are met. If these standards are not met, the organization may have to change its activities or strategy.
Another benefit of IP auditing is that it provides a clear delineation of techniques/strategies/products that boost the company’s profitability. The corporation can determine which assets are unnecessary and which are required. As a result, the output of an IP audit helps to organize IP review. An IP audit aids in assessing the benefits that an IP may give based on the market appraisal.
Conclusion
A firm’s IP audit is critical. As businesses recognize the value of their intangible assets and the rights that go with them, the importance of intellectual property (IP) is only going to expand. As a result, the job of intellectual property audit and valuation has a long way to go. Professionals will undoubtedly refine their abilities in order to undertake relevant and effective audits and valuations, which will aid firms in protecting themselves against horrifying future mishaps.
To be more specific, IP auditing assists the firm in conducting a SWOT analysis –
However, in order to obtain this information about the company, an IP audit must be performed on a regular basis. IP auditing assists in creating and updating inventories of intellectual property assets, as well as analyzing.
- https://www.intepat.com/blog
- https://www.innovation-asset.com/
- https://blog.ipleaders.in/
- https://www.mondaq.com
