Invest in your business - do an IP review

07 May 2009
Intellectual property (IP) reviews are becoming increasingly popular as businesses rely more on their IP for competitive advantage, and are looking for ways to improve their profitability in tough economic times. Matt Devine explains why doing an IP review makes good business sense.

What is an IP review?

An IP review, also known as an IP audit, is a due diligence on IP aspects of a business’s operation.  Often, it is commissioned by the business itself, in which case it is a “self” due diligence. An IP review can take many forms, depending on the size and requirements of the business undergoing the review.  A review might be as simple as identifying the registered and unregistered IP held by the business. Alternatively, the review might entail a full due diligence that investigates all aspects of the business that relate to IP. 


Typically, an IP review might investigate:

  • the existence and quality of registered and unregistered IP
  • the processes for identification, capture, protection and control of IP
  • commercial exploitation of IP
  • ownership of IP
  • exposure to infringement of third party IP
  • the agreements in place with third parties
  • IP that is no longer relevant to the business with a view to drop, or sell it.


What value is obtained from an IP review?

At the very least, the IP review will give a clear overview of the business’s current IP position.  But it can provide much more.  For example, the conclusions can be used to set or redirect IP strategies, identify IP driven business opportunities, rationalise IP expenditure, highlight IP risks and gaps, and develop IP processes and culture.  The conclusions can be used to improve profitability.


When is a good time to conduct an IP review?

If your business has never had an IP review, now is a good time to consider doing one. A business may have started down the track of obtaining IP protection or advice, but never considered ‘the big picture’.  An IP review at this stage would help set a coherent approach to IP rather than an ad hoc one. A coherent approach has significant downstream cost and value benefits.

After an initial review, IP reviews should be conducted periodically to reassess IP aspects of a business. 

Other events that might trigger an IP review include:

  • exit strategy planning
  • funding rounds
  • IPOs (initial public offering)
  • purchase/sale of a business
  • purchase/sale of IP
  • mergers, joint ventures, collaborations
  • licensing of technology.


Care is needed when undertaking IP reviews

By their very nature, IP reviews can (and should) highlight risks, deficiencies and areas for progress in all IP aspects of the business.  But in a self review, there’s little point in simply highlighting these matters.  The business should address the risks and deficiencies, and make progress where possible.  Leaving matters unresolved defeats the purpose of the review, and worse, can expose the business to liability.  It is important that the IP reviewer is qualified to provide advice and action on the conclusions of the review in a seamless manner.
 
Further, in any review, the IP reviewer should be able to provide you with legal and/or patent attorney privilege.  This reduces the risk that any negative conclusions of the review can be discovered in court proceedings and used against your business.  If a reviewer cannot provide legal and/or patent attorney privilege, any communications between the reviewer and client can be discovered.

 

An IP review is an investment

An IP review is a good investment that can provide benefits that far outweigh the cost of the review.  In the current economic climate, improvements in business profitability are vital.  An IP review is one tool that can help provide considerable improvement.

This article was published in IPNewz, May 2009.

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