Do I need Intellectual Property Audit?
You should analyze from time to time the value of your IP rights. This is called an “IP Audit” and it will help you in valuing your intellectual rights.
The audit can be conducted by your company, or by outside company. The important aspects of the audit is to:
- Identify the products and services that are crucial to the business.
- Identify the IP rights associated with such products and services.
- Identify what market advantages these rights give and how they are used in the business and if they can be used in a better way.
- Identify all IP rights currently hold by the company and evaluate how much these rights cost and if they are still in use.
All IP rights, like the tangible assets, must create value to the company. So, if rights are not used, for example a patent, a company must take a decision to continue paying for the rights or just abandon them. The abandonment of rights can arise if the technology changes, the old technology is not used anymore, it cannot be licensed to the other companies.
In such situations, to keep the rights are not worth, because they cost money: renewal fees, protection fees, management fees, etc… The patent in Europe costs every year. The price increases each year. And if the technology is outdated, such patent should not be renewed.
The same can be said about territorial protection. All IP rights are territorial. So you pay renewal fees in each and every territory where the rights are registered. Imagine, your rights are protected in Costa Rica. But you have never started selling in Costa Rica, even if at the beginning you thought, it will be your greatest market. So sadly, the decision should be, not to invest more recourses in your IP portfolio in Costa Rica.
What you can try to do, when you see your rights does not give profit anymore (or never did…)?
- First, you can try to sell the IP rights. Maybe someone still needs the technology? You can recoup the prior investment, or at least a part of it, by selling the rights. There are online platforms, that helps to sell the IP rights. But you can also always contact the possible interested parties, and offer them your IP rights with a very attractive discount.
- Second, you can try to enter into patent pool with other competitor companies. The more patents you have, the higher are the possibilities that you will be accepted to the patent-holders team. You might not use the patent directly, but it can help to assure, that other members of the patent pool will also not attack you for the patent infringement.
- Third, if neither the First nor the Second option works, just let it go. IP rights should reach the public domain. Sooner or later. So if you don’t need the rights, expand the public domain. Maybe someone will create a new technology, once your patent rights finishes, maybe somebody else will create a successful similar trade mark, once your is gone. All creative art is based on previous art. It is nice to know, that your idea gave an inspiration to the idea of somebody else.
As a starting point, try to calculate how much time would be required to develop these assets from scratch or how much a competitor might pay for them. An accountant may be able to help you value these assets and place them in context of your business.
If you want to learn more about intellectual property audit – contact our us for more information.