Intellectual property rights audit - finding what you have (Part V of V)

Outline of the mechanism of intellectual property audit

The first step to implement intellectual property audits is to plan the audit. The Audit Committee (typically a representative of Intellectual Property Lawyers, Management, Marketing, Technology, or Research and Development) establishes the scope of the inquiry and sets the schedule for the audit to be carried out. I will explain the responsibility of each member of the audit team. After that we define a preliminary document for review and decide which members of the organization (current and past) to interview.

Lawyers develop intellectual property databases. The owner of the intellectual property, the class of the asset, the inventor or the author, the status of the asset (trademark right, domain name, etc.) at the time of creating or acquiring the asset, the problem of continuous maintenance (eg payment of the maintenance fee of the patent, Collection or payment of license fee), expiration date of the asset or update date, etc. With this database, organizations can accurately grasp assets of intellectual property and grasp the status of each asset.

After the database is created, the attorney and the internal audit committee in the organization analyze the intellectual property and decide what action to take for each intellectual property. Committees and lawyers also identify the mechanisms an organization should use to identify and protect each of the intellectual property that an organization develops or otherwise acquires.

Thereafter, the audit team documents the audit results and submits recommendations to the organization on where inadequate protection of intellectual property is and where protection is to be reduced where protection is possible.

Advantages of Intellectual Property Audit

Audit of intellectual property rights will benefit buyers, owners and investors of intellectual property.

Intellectual Property Owner

An intellectual property owner may rely on a component of the value of the organization (the higher the priority, the higher the value of the intellectual property audit), when obtaining the benefit from intellectual property audits, When out, there are questions concerning real estate, sale of shares or corporate assets, or commercial involving real estate.

Intellectual property buyer

In the case where a purchaser of intellectual property acquires stocks or assets of a company, it is necessary to conduct an audit of intellectual property rights, determine the extent and level of protection, and make investment worthwhile It is necessary to guarantee. This buyer needs to examine the license or distribution right already existing in the company and the license or distribution right the company is about to install. The buyer determines whether the property is properly protected against potential third party claims against possessions (for example, if developed by a consultant, whether the consultant properly assigned the property to the organization, etc.) I am interested in judging. ), Whether the property is collateral to guarantee debt, whether federal and state registration is necessary and properly maintained, and if you have licensed or purchased from a third party.

Intellectual property purchasers may also be interested in simply acquiring rights to the intellectual property itself without acquiring part of the stock or assets of the organization that developed the intellectual property itself. The buyer determines whether the third party has intellectual property rights to participate in a part of the property possessed, where the trade secret exists in order to raise the value of the property, whether the license exists It is necessary to investigate. Regardless of whether the property is involved in any way by government-sponsored activities, the organization has the right to own it.

Intellectual property investor

Intellectual property rights investors need to request the audit of intellectual property when considering financing of entrepreneurial companies and procuring funds of existing businesses. Frequently, intellectual property is the sole asset of founded enterprises and often occupies most of the value of existing companies. With due diligence, investors need to make sure that the property is fully protected. In addition, investors judge that the information gathered by the audit is useful so that investors will be useful for the situation of debtors / creditors who will accept unsecured assets as collateral for loans.

Conclusion

Intellectual property rights audit is a necessary and important management tool in today's knowledge economy. Indeed, this is the only way to assess the true value of an organization, the only way an organization can maintain and grow its intangible assets. The day the corporation was evaluated at the price of its real personal asset no longer exists. Today, managers and investors need to understand not only the intangible aspects of business but also specific aspects. Intellectual property rights audit is a way to grasp the reality.

This article, originally, Germeshausen Center Newsletter It is published in the 2003 winter issue. It will be expanded to its present shape later, Les Nouvelles , Vol. 38 No.4 (December 2003) 193 pages. This article has been updated with this presentation.