An IP audit is a systematic analysis of what intellectual property assets your business owns, uses, or has an interest in, in order to maximize benefits, minimize risk, and eliminate inefficiencies.

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There are many different types of IP audits ranging from fairly straightforward to extremely complicated (depending on the type and size of your business and the scope of your audit). Generally speaking, however, conducting an internal IP audit involves four steps:

(1) Identify and collect information related to all intellectual property your business owns (or believes it owns), uses (regardless of ownership), or has an interest in;

(2) Confirm the ownership and legal status of all assets identified;

(3) Conduct a risk assessment and identify gaps in coverage; and

(4) Identify and take all steps necessary to protect the identified assets, insulate your business from risk, and eliminate inefficiencies.

Step 1: Identify the IP Assets

The first step in conducting an IP audit is to identify all IP assets your company owns, believes it owns, uses, or has any interest in. This includes trademarks, copyrights, patents, and trade secrets and, depending on the scope of your audit, could also involve business names, domain names, confidential or proprietary designs, or potential inventions. Accurately identifying the universe of potential assets is crucial to the overall success of the audit.

Step 2: Confirm Ownership and Legal Status

Once you have a complete list of IP assets, you can begin the process of confirming proper ownership and legal status of those assets – is each asset owned by the correct legal entity? Are the assets federally registered or in the process of obtaining federal registration? Are there assets that need to be assigned to the proper legal entity and ownership information updated? Do you need to consider licensing the assets to the entity currently using them (if not the legal owner)?

Step 3: Risk Assessment and Gaps in Coverage

Now that you are working from a complete list of assets and you know the ownership and legal status of each, you can evaluate any existing risks: Are you using marks that potentially infringe on the IP rights of others? Have you maximized protection of each asset under state and/or federal law? Do you have maintenance or renewal deadlines approaching that you must meet in order to avoid the abandonment of any registrations? This step can also involve evaluating your internal processes and existing agreements including licenses, assignments, employment and independent contractor agreements, joint venture and collaboration agreements, non-disclosures, sales, service and vendor agreements, and research and development agreements.

Step 4: Execution and Alignment

Finally, to the extent you have identified gaps in coverage or protection, take whatever steps are necessary to fill those gaps. This could include updating ownership information related to state and federal registrations, revisiting and updating internal processes and existing agreements (or forms for those agreements), shoring up the assets most central to your business strategy and identifying those that no longer align and determining whether you should continue to expend to maintain those assets. Likewise, eliminate any potential infringement with third-party IP and police and pursue infringement of your own IP in order to avoid any dilution of your existing rights.

Klemchuk PLLC is a leading IP law firm based in Dallas, Texas, focusing on litigation, anti-counterfeiting, trademarks, patents, and business law. Our experienced attorneys assist clients in safeguarding innovation and expanding market share through strategic investments in intellectual property.

This article is provided for informational purposes only and does not constitute legal advice. For guidance on specific legal matters under federal, state, or local laws, please consult with our IP Lawyers.

What Is an IP Audit and How Do I Conduct One For My Business?

Intellectual Property Attorneys

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