Protecting Your Company's Intellectual Property through an IP Audit: a Guide for Small to Mid-Sized Businesses

Authored by Stacey Halpern, Emily Sauter, Jeff Van Hoosear, & Jonathan Menkes of Knobbe Martens Intellectual Property Law.

Intellectual property (IP) assets are often one of the most valuable assets a company owns. Apple recently won a judgment for over $1 billion from Samsung for its willful infringement of Apple’s design and utility patents. The recipe for Coca-Cola is a famously guarded trade secret that is so valuable to Coca-Cola’s business that the company has even refused to disclose it under two judge’s orders. Google’s trademark is estimated to be worth 27% of the company’s total value at $44 billion. Domain names can also be worth several million dollars (toys.com was auctioned at $5.1 million and sex.com sold for $11 million ). Although these are extremes, many businesses generate significant revenue from their intellectual property holdings.

Despite the importance of a business’s intellectual property assets, many companies treat their intellectual property matters as static or isolated projects to be reviewed ‘as needed’ instead of as a dynamic or continuous project that must be consistently maintained and reevaluated. Failing to treat your company’s IP as a top priority and as a continuous and constantly evolving project can be detrimental to your company and its ability to effectively compete in the marketplace. Furthermore, a business’s IP goals and strategies can change based on numerous factors. The IP arena is constantly changing and evolving and has rigid deadlines and rules for protecting intellectual property assets that can be very complicated legally.

The skills and expertise of lawyers and agents who specialize in intellectual property law are frequently needed to ensure that the IP is being properly maintained and managed. However, small and medium sized businesses can do their part to reduce legal fees while maximizing the value of their intellectual property holdings through conducting regular audits. Just as individuals set up personal goals and resolutions for the upcoming year, companies should also set up (and follow through with) the goal of annually auditing their intellectual property assets. This will help to ensure that the business is on track to protect and maximize the revenue from its IP portfolio.