Surprisingly, in many companies intellectual property may be valued at over 50% of the firm’s market value. Often, this means the IP is worth more than the physical plant and equipment.

When the company employs operational excellence philosophies such as Six Sigma and lean management, there is focus on the wastes within the company. This focus includes both identification of the waste and development of methods to remove the identified waste. Given long enough most wastes are identified and reduced or removed. However, one waste that most companies do not recognize is the waste of the firm’s intellectual property.

As a consequence, an audit of the firm’s intellectual property ought to be an utmost priority. The audit should not only include the obvious intangible IP assets such as patents or trademarks, but additionally include IP policies and procedures. Specific items are: confidentiality agreements, key employment agreements, and software licenses and contracts.

In an IP audit, all intangible assets should be properly identified and inventoried. The inventory needs additionally to focus on proper maintenance and assignment of the intellectual property, especially if there has been a merger or acquisition. Beyond the bookkeeping though, determinations are to be made as to whether or not the assets have received the optimal form of IP protection. For example, certain potentially patentable inventions may be better left as trade secrets.

Another example of waste to be liquidated includes protection of unneeded or outdated IP assets. Aptimise offers analysis of critical as well as unused assets and can provide recommendations for either their disposition or protection. Unused assets can occasionally be sold or licensed to others to generate additional revenue.

Planning of the IP audit involves defining the scope as well as the individuals to be accountable for each phase. Further, it should list what documents will be reviewed and the types of reports to be written in order to memorialize the findings.

Business owners frequently wait until the last minute to conduct IP audits. Waiting until a significant corporate event such as a merger, acquisition, public offering, equity event, or bankruptcy is like reviewing your medical insurance coverage while riding to the hospital in the ambulance.

For more information send an e-mail to dramsey@aptimise.com and one of our experts will be pleased to discuss your situation.