As your business grows it is essential that you identify and keep an inventory of your intellectual property (IP) assets. This is called an IP audit and it will help when it comes to seeking protection for your intellectual property. Understanding your IP assets is a vital part of business planning.
Identify your IP assets
The first steps in an IP audit are:
- identify the products or services that are key to your business
- identify your IP assets and the legal rights that constitute them in relation to your goods or services
- understand what market advantage these rights give you (i.e. cost, performance, timeliness).
Value your IP assets
You should value your IP assets just as you would physical assets.
For example, your customer list or database can be a competitive intangible asset you need to identify and protect. A secret recipe or a unique service technique also falls into this category.
As a starting point you can try to calculate how much time would be required to develop these assets from scratch, or estimate how much a competitor might pay for them. An accountant can help you to value these assets and place them in the context of your business.
Consider the types of protection available
Once you have identified your IP assets, make sure you have appropriate IP protection. This may include a patent or trade mark, or less formal strategies such as trade secrets or rapid production and development.
Consider the IP rights of others
It is important to ensure that you understand the IP rights of other people or organisations you have dealings with.
For example, a large amount of off-the-shelf software is limited in the way it can be used by a licensee. You may find that if your products or services rely on such software, you may be breaching the licence conditions and infringing someone else's IP rights.
Once the audit and valuation process is complete, you can look at your options to commercially exploit your IP.
Next step: from audit to strategy
The audit process will enable you and your legal adviser to determine:
- the best IP strategy for your business
- the likely costs, risks and benefits of that strategy
- the best way to maintain your IP assets
- whether you are likely to infringe someone else's property rights.
Last Updated: 29/11/2012