2015 Issue

12 C AN YOU PROTECT anything if you don’t know what and where it is? Knowing this information is key to knowingwhere to direct any IP protection efforts. An IP audit can help. An IP audit is simply an asset inventory that keeps track of own- ership and value of each IP asset. It should identify procedures to protect IP as well as look at whether those procedures are being followed. A company’s IP consists of copyrights, domain names, patents, trademarks, trade dress rights, and trade secrets. IP provides your company with a number of opportunities, but it also includes risks. Executives and IP counsel should understand these risks in order to make a better and more effective use of IP while minimizing the risks as much as possible. The obvious question is what happens if you don’t understand the potential for and the risks associated with IP. Companies that don’t pay attention to IP can end up wasting both resources and goodwill within the marketplace. For example, if a company doesn’t bother to protect its IP, third-partys may sometimes use and copy those assets. It may therefore be more difficult to defend the company from the unauthorized use of the IP asset, especially if the third-party then accuses the actual IP owner of infringement. An IP owner can put its IP to work and protect itself. To do this, IP owners should maintain internal controls that monitor creation, protection, management, and use of IP. In other words, an IP audit should be conducted. The Benefits of a Regular IP Audit Why is an audit such a good idea? • If a company is involved in a merger or an acquisition, or if intellectual property assets are to be used as collateral, having a current valuation of the IP can significantly increase the value of the entire company. It would be advantageous to know this informationwhen negotiatingwith others in order to have them understand how a company’s IP might influence the future. • Being casual about IP can decrease its value. If it is worth more than it is believed to be, then some of the benefit of owning the asset may be lost entirely. Also, licensing IP to a third party can increase cash flow, but that can only take place if the value of IP is known and put to work. • Part of the cost of doing business is paying for IP assets. If any of these assets have expired or are obsolete, then the main- tenance costs may be reduced and those costs may be saved and used to support the pursuit of other IP protection. • Knowing what IP assets are worth will help to decide whether it is worth going after a third party for infringement. Additionally, knowledge of current IP laws and vigilance in protecting assets provides for evidence necessary to help prove a potential case in court. • Most people do not retire from the first company that ever hired them. Employees leave, and when they leave, they take infor- mation about a company with them. It should not be assumed that an ex-employee is loyal to the interests of a company he/ she has left. • Some entities look around for IP belonging to other com- panies. Accusing the actual owner of patent infringement is not just something that happens to someone else. If this happens, it may cost unforeseen amounts of money and time that could have otherwise been spent on achieveing other goals. Protecting Your Intellectual Property (IP) By Brian J. Riddle and Jeffrey K. Riddle, Van Cott, Bagley, Cornwall & McCarthy, P.C.