What is an IP Audit? Why should I do one? Why should I care about my IP if I am a small business or nonprofit? These are some of the common questions I hear when I talk about the importance of IP Audits. If you ask these same questions, read this post to learn about the benefit of IP Audits.
Intellectual Property, or “IP”, is one of the most important and lucrative assets that most businesses have. Unfortunately, being “intangible” – something you can’t see or touch – intellectual property often goes unrecognized.
Between trademarks, copyrights, and patentable inventions, businesses often have tons of Intellectual Property that they are leaving unprotected. As we’ve written in the past, protecting Intellectual Property isn’t just for major companies. It’s important for small businesses, start-ups, and nonprofits too.
An IP Audit is a great way to find out what intellectual property assets you have, identify threats, and explore opportunities. IP Audits are a common practice in businesses and nonprofits looking to take their brand and mission to the next level. Here’s how it works:
1. Identify your IP assets
The first step of an IP Audit is to determine what Intellectual Property your business has.
- Patents – for example: inventions, processes, designs, and plant cultivars.
- Trademarks – for example: name, slogan, logo, product packaging, and even smells.
- Copyrights – for example: books, music, videos, choreography, and artwork.
- Trade Secrets – for example: formulas, recipes, customer data, pricing.
Why it may seem easy, your IP assets are not always readily apparent. The purpose of an IP audit is to uncover these valuable gems. An IP Audit also identifies assets that erroneously think you own. Once you identify all of your IP assets, you can make informed decisions about how to value, use, and enhance their value.
2. What Are Your IP Rights?
Once you identify your IP assets, you identify your rights to use or control the use of the IP. Since intellectual property can be co-owned, bought, sold, and licensed, you may not have exclusive control over the asset.
For example, when two businesses partner to develop a new technology, they often jointly own the patent to the technology and perhaps even the trademark on the brand.
As another example, nonprofits often join forces to produce joint programs, events, or publications. The intellectual property will be jointly owned unless they agree, in writing, to another arrangement.
Finally, you can license intellectual property. For example, when a nonprofit and for-profit enter into a commercial co-venture agreement, they license right to use each other’s name, logo, and other intellectual property. (A commercial co-venture is when a for-profit sells a product that promotes a charity and a portion of the sales proceeds go to the charity).
Many businesses and nonprofits do not recognize the various types of intellectual property. The lack of knowledge sometimes results in inadvertently giving up your rights.
A common example is when a business or nonprofit hires a consultant to develop a branding campaign but does not confirm, in writing, the ownership of the branding materials. By default, the consultant will own the logo, photos, publications, and other creative items that the consultant designs and creates for the client. Read this post to learn more about describes copyright law and jointly-produced works.
3. Should Register Your IP?
The third step of an IP Audit is to decide what to do with the Intellectual Property you own.
You might need to begin the trademark process. Trademark registration will give you exclusive rights to use a name, slogan, logo, or other branding items.
Copyright registration will protect creative works – such as a video, publication, or song – that have the potential to generate revenue.
Trade secrets are protected only to the extent they are a secret. An IP Audit will identify trade secrets and your attorney will advise you how to protect your trade secrets.
If you uncover unlawful use of your trademarks, copyright, patents, and trade secrets, you may need to send a cease-and-desist letter or take other legal action.
The US recognizes statutory and common law intellectual property rights.
For example, you automatically possess a common law copyright in creative works as soon as you publish them.
However, it is impractical and expensive to register a copyright for every photo, blog post, and artistic work that you create. Thus, it is important to assess the economic value of the work and the potential to generate revenue from it before deciding whether to register the work.
Assessing risk, evaluating the benefit of registration, and tackling infringement requires specialized knowledge. You won’t save money going the DYI route. I encourage you to consult an IP attorney, such as Concerto Law, to guide you.
4. Keep IP Registrations Active
Finally, most intellectual property rights endure for a defined period. You must periodically renew trademarks. Patents expire after a certain period. Copyrights also expire, although the exclusive ownership period lasts for decades.
If you fail to renew a trademark registration or if your patent or copyright expires, you no longer the have exclusive right to the property. Others can capitalize on this and take your brand name, publish your book, sell prints of your art, etc.
During an IP Audit, your attorney will identify the registration expiration or renewal dates of your intellectual property and advise how to handle these expirations and renewals.
How We Can Help
IP Audits typically require the guidance of an Intellectual Property attorney. An attorney knows what to look for and how to protect you IP assets. Although businesses and nonprofits often start an IP Audit on their own, they invariably end up asking for an attorney to come and finish the job.
If you are ready to see what an IP Audit could do for you, contact Concerto Law today! We have experience, we know what to look for, and we know what to do with it when we find it. We want to break through the noise of bad internet advice!