A great business owner knows exactly what makes his or her business stand out among the competition — whether it’s a hard-earned reputation associated with their business name, exceptional service offerings, a top-secret recipe, unique and useful goods, or innovative technologies. But many business owners don’t take the appropriate steps to adequately protect their business’s competitive edge, often because they don’t know where to start.
Intellectual property can take many forms, and can be found woven throughout every facet of a business.
Trade secrets: A company’s secrets, such as customer lists, recipes, techniques, or processes that derive independent economic value from not being generally known to others.
Copyrights: Protect a company’s blogs, publications, software, product manuals, artwork, web designs, marketing materials and any other original work of authorship created by the company.
Trademark: A business’s name, logos, symbols, phrases and other identifiers associated with the goods and/or services provided by the business.
Protected trade dress: The look and feel of a product’s packaging, or the façade of a display associated with goods.
Patents: Protect especially unique and non-obvious inventions, processes and business methods, and design patents can protect the non-functional, ornamental design of an otherwise functional item.
Why have an IP audit?
There are a number of different reasons why a business might want to conduct an IP audit. An IP audit provides a business an opportunity to assess all the potential IP assets it may have and to review any potential risks or opportunities associated with such assets. In general, an IP audit will assist a business in identifying intellectual property assets that are not adequately protected or being used to their potential. It can also help a business determine what assets it does not have a right to, and develop internal policies and procedures to guard against inadvertent infringement of another’s IP.
The scope of an IP audit can be company-wide, event-specific, or tailored to focus on a particular type of IP. Some scenarios that might trigger the need or desire to conduct an IP audit might be: considering a merger or acquisition; developing or launching a new product or service; licensing or assigning IP; or a major new development in intellectual property law. A business might also want an IP audit to evaluate a third party’s infringement claims and possible consequences, consider any bad habits or potentially risky behavior of the company or its employees that may have resulted in infringement of another’s IP, or contemplate the impact of a key decision maker or employee’s hiring or departure from the company.
What Information is needed?
The first step in a general IP audit is to identify what intellectual property the business has and may potentially have. As a starting point, a business should consider:
- Where are the ideas and plans for the business coming from? Are employees or independent contractors creating materials for the business? Do the employees or independent contractors have agreements with the company? If so, are there IP provisions in the agreement?
- Does the company have any brand recognition? What are the central trademarks or other identifiers that distinguish the company’s goods or services from those of others?
- What goods and/or services does the business provide? What makes the goods and/or services different from others?
- Does the business have any secrets? How does the business maintain confidentiality of its secrets in day-to-day operations?
- Does the business have one or more domain names? How is the website being used (e-commerce, informational, interactive, etc.)? Does the business have a social media presence or blog?
The answer to each of these questions holds a different key to uncovering intangible qualities that add value and differentiate a business. An effective IP audit can help any business to determine what IP it has, whether it’s using and protecting its IP to its fullest, and how to avoid the pitfalls of inadvertent IP infringement.