It is now well established that the most valuable assets of a
21st century business consist of its intellectual
property, including its trade marks, copyrights, patents or
confidential information. An IP audit helps in identifying,
protecting and managing these assets.
In broad terms, an IP audit is conducted to identify the
company's IP assets and ensure that the assets are being
appropriately protected, managed and valued. An audit is a
useful management tool at any time, but may be prompted by a
significant financing, the recognition that IP assets are not
sufficiently protected, or a recognized management need to develop
strategies that will maintain and improve the company's market
In order to carry out an IP Audit, a systematic review is
conducted of the IP assets owned, licensed or used by a business.
In many cases it will be found that some of those assets are not
protected appropriately and are also under-utilized. An
assessment may also reveal whether a business's current
activities infringe the rights of third parties.
In some cases businesses lack the necessary resources to
undertake a complete and exhaustive audit. In such cases, the
review can be more limited. But the need to do one
cannot be safely ignored.
The IP Audit process can also determine the value of IP
assets. Financial value provides a signal for how to manage
various IP assets in the future. As it is said, if you
don't measure it, you can't manage it.
Once the audit has been completed a strategy can be developed to
ensure that IP assets are appropriately protected and
utilized. For example, if the company's primary asset is
confidential information and know-how, then essential steps should
be taken to ensure that such material is protected within the
company and in the hands of business associates, suppliers and
Frequently businesses lose sight of how important their
intellectual property is or they may never have developed an
appreciation of it in the first place. Trade marks are a case
in point. For a company selling its goods in association with
a trade mark, the trade mark may be the key asset of the
business. It needs to be registered, used and monitored for
potential infringements. Registration and
continuous monitoring give a company more freedom and ease in
protecting and leveraging its trade marks. IP Audits are more
than just legal or financial exercises. In some instances
business and marketplace input concerning brand management or
valuation of IP assets may be required. We are well
positioned to co-ordinate such input.
This is just a very brief overview of the IP Audit
process. Every business should consider implementing one.
Dr. Ruth M. Corbin is Chair of CorbinPartners Inc. and Adjunct
Professor at Osgoode Hall Law School. CorbinPartners customizes IP
Audit documents to industry, government and education sectors, and
develops benchmarks for assessing the marketplace value of IP
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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