IP AUDITS: WHAT'S IN YOUR PORTFOLIO
James: Hello. My name's James Longwell. I'm a partner in the Canadian offices
of Gowling WLG. The topic we're going to explore today is IP Audits: What is in your IP Portfolio?
By way of overview we're going to look at three main questions. What is an IP audit?
Why conduct an audit? How do you conduct an audit?
So what is an IP audit? Well, it's a rigorous systematic review of the IP that's owned or
used by a particular entity. It identifies intellectual property. Assesses its nature,
scope and ownership. It reviews internal intellectual property policies and procedures and
even in an extensive audit one can look at the rights of third parties.
In many contexts, in many ways, an IP audit is similar to a due diligence review in an M&A deal.
Why does one conduct an IP audit? Well, there's four main reasons.
You can identify potential anomalies, for example, ownership anomalies on a public record may be
inconsistent. You can identify potential gaps in intellectual property protection.
Mapping is a process of associating intellectual property rights with
aspects of a particular business, showing where the business is covered and where it is not.
Steps may be taken to resolve the gaps and boost one's coverage. Potential cost savings
and efficiencies are often also identifiable. Mapping can show those assets that are unused,
under utilized or otherwise no longer valued. These assets may be dropped, sold or licenced.
Opportunities can be identified to improve the management of one's portfolio. For example,
consolidating management might improve efficiency and lower costs. Potential risks are often also
identifiable. Agreements can be reviewed and show where compliance issues may arise.
Certain intellectual property assets may be susceptible to being extinguished. For example,
trademarks require use in a particular jurisdiction to maintain that registration.
How does one conduct an IP audit? Well, it's important to establish
good practices at the beginning and that starts with establishing a solid team.
Particularly having assistance from knowledgeable personnel with sufficient authority
to ensure that an audit progresses smoothly, on time and on budget. Outside personnel should
have knowledge of one's business as well. It's important to have an audit scope at the beginning.
The team gets together, discusses what the specific objects are of the business and
tailors the scope appropriately. Where a business is more focused on a type of IP
asset or as a particular line of business, for example, that it wants to review,
possibly because it was a recent acquisition, the priorities can be established accordingly.
How do you conduct an IP audit? Well, there's lots of approaches to be taken but I think, in general,
it's very important to create a tailored checklist that guides the review of the audit.
It can establish what type of IP and documents and so forth that can be reviewed as well as
questions that should be addressed to each of those. A particular agreement,
for example, may have different kinds of issues than other kinds of agreements.
When compiling and reporting the findings it's important to be
clear. Have a great summary of what the findings are and what the potential issues may be.
Analysis can be performed and recommendations generated.
And then, finally, from those recommendations a cost estimate is prepared, prioritizations of
the various requirements may be taken, and then finally action is directed.
In summary, for businesses that have invested in the development or acquisition of intellectual
property assets, conducting an IP audit provides valuable insights and opportunities. Once audited,
a business will have a better position to strengthen its IP portfolio and harness its value.
I recommend, if you have an opportunity, to visit our
remaining portfolio of information and videos and so forth at our GoXL platform
and to reach out to any of our Gowling professionals if you have any questions.
Thank you.