Importance of Intellectual Property (IP) Audit

INTRODUCTION- IP AUDIT

IP AUDIT
Importance Of Intellectual Property (IP) Audit

The Importance of IP Audit Systems in Businesses and Organisations “If you don’t measure it, you can’t manage it” is a very apt saying and explains the entire intent of this service vertical. Intellectual Property and its laws have changed significantly in the last few years. Though there is no statutory provision for performing an Intellectual Property audit yet, it’s indispensable when managing an organisation’s intangible assets. Considering the value and power of Intellectual Property, too much is at stake to ignore the promotion, protection, and commercialisation of such valuable property, and ignorance of the laws can lead to legal disputes. It is not surprising that infringement lawsuits are proliferating. The process of IP Audit has been regarded as a crucial tool for the efficient management of Intellectual Property. The auditing process comprises different stages, such as the data collection of the IP assets of the organisation along with the Intellectual Capital, evaluating the data and analysing the IP Assets trends and ascertaining the asset’s inadequacies and virtues management. Enumerating an organisation’s IP assets amounts to an IP audit done by the proper and systematic analysis of each sector of IP that has possession of the organisation, which includes the list of organisational, relational and human capital. The IP Audit also helps evaluate the organisation’s elementary and critical capabilities by a comparative assessment of the input versus output of the company.

It thus becomes mandatory for any organisation to protect and safeguard its Intellectual Property. To do so, the companies must understand what rights the organisation owns, whether the organisation is defending its right correctly, is the mode of protection adequate, and whether it has a proper procedure to determine what rights it should be registering, whether it has a system to minimise the risk of infringing third party rights, evaluation of contractual term for the right assigned or used under license, how trade secrets are protected from employees, should the organisation develop back up ‘mark’, how big should be the inventory of trademark and such other vital issues. An IP Audit is a systematic review of a business’s owned, used, or acquired IP. Its purpose is to uncover under-utilized assets, identify any threats to a company’s bottom line, and enable business strategists to devise informed strategies to maintain and improve its market share and brand equity. IP audits can be of various types, such as general-purpose, event-driven, and limited-purpose audits, and vary with the client’s needs.

  • A general purpose audit is a regular audit conducted as a general review practice periodically.
  • An event-driven audit is done when the client/ company enters a particular financial transaction or event.
  • Limited purpose Audit, as the name suggests, is limited to a particular purpose and specific selected intellectual properties.

How to go about conducting an IP audit?

The purpose of conducting an IP audit must be kept in mind before carrying out an IP audit so that a structured plan can be made with the available resources.  A track of the activities involved in the IP audit is essential to assess if there are any deviations from the pre-planned structure. IP audit involves several processes, which can be explained briefly.

  • The initial step is the inventory check, where all the IP assets, along with the description of the nature of investments, are determined.
  • The next step is the process of scrutiny, where it is checked if the existing IP right infringes any of the co-existing rights.
  • The final step is where an IP auditor identifies the legal, regulatory and procedural lapses related to the management of IP.

Through this process, efficient risk assessment is achieved, enabling the adoption of adequate steps for mitigation.

Experience – Intellectual Property (IP) Audit

The Intellectual Property (IP) Audit Systems in Businesses and Organisations IIPRD has worked with numerous Indian and International Corporates to help set up their IP Cells and conduct IP Audit and Due-Diligence programs. IIPRD has set up a dedicated IPR Audit cell, which deliberates and works on issues that business organisations might face.

If you need to establish correct practices to manage your Intellectual Property, please reach out to us at IIPRD, and we assure you that our team having the right skill set across technology domains, would help you introduce and place on record the correct IP Management systems.

Our Approach – Intellectual Property (IP) Audit

The IIPRD’s Intellectual Property (IPR) Audit cell goes through an unbiased audit and follows the perfect due diligence practices that can help the corporate in:

  • We are establishing the right IP strategy and correct practices to mitigate risks and facilitate structured IP management at the corporate level.
  • They are introducing and placing on record the correct IP Management Systems. IP management systems lead to value creation and value extraction that help in the methodical assessment of IP quantitatively and qualitatively.
  • They are leveraging IPR for business growth and the best strategies that help the organisation’s decision-making processes. Value of the existing and prospective assets is measured, contributing to decisions in case of collaborations, acquisitions and mergers in the corporate world.

We at IIPRD initiate the Intellectual Property (IP) Audit process by reviewing the existing IP Policies, Standards, Controls, Compliance Procedures, and Practices in the Corporate. Based on the review, assets are classified based on their nature of assets as statutory or non-statutory IP assets. Statutory assets are patents, copyrights, trademarks, plant varieties, and geographical indication, whereas non-statutory rights are technical know-how, technical information, brands, tradenames, trade dress, client information etc. After the step, critical analysis and comprehensive discussion are done on the existing IP Portfolio of the Corporate, and extensive timeline-based policy changes, transformations, and activities are charted out to ensure a steady and robust growth in the IP Portfolio of the Company keeping in mind the twofold mandate of Enforceability and Commercialization Capability.

We at IIPRD also play a critical role in the organisation’s decision-making processes in case of transfer and licensing arrangements to third parties. We carry out meticulous scrutiny of IP portfolios through the preparation of comprehensive reports.

As it is said, the individual character can influence the organisation’s growth as well the nature of an organisation shapes the individual. IIPRD works through this mantra wherein the organisation and its dedicated workforce work hand-in-hand towards meeting the diverse requirements of our clients. IIPRD Professionals are well acquainted with the nitty-gritties of strategising and decision making and forecast possible risks while taking such decisions.