Auditing trademark portfolios: a step-by-step guide

Many companies estimate the health and relative worth of their IP portfolios based on size alone. However, those IP rights could be worth far less if the following checks and balances are not also considered.

A thorough audit of your trademark assets could help you to identify ways to streamline and exploit your portfolio, saving you money while also improving the efficiency of your assets. This includes identifying any potentially damaging gaps in coverage (such as products or services that haven’t been properly protected), geographical coverage that may be missing, opportunities to update the existing portfolio in light of legislative changes (e.g. EU trademark reform) or, even, political changes, such as Brexit.

Undertaking an IP audit will also enable you to consolidate your rights and agreements by providing you with a clearer picture of your IP assets, and their respective strengths and weaknesses. This is crucial whether a company is preparing its IP portfolio for sale, launching a licensing programme, managing budget cuts or simply looking to ensure its IP portfolio reflects and supports its future business strategy.

We typically find that many companies can reduce their spending on IP matters and ringfence the strength of their rights by auditing their IP portfolios, using the following three-step process:

STEP 1: Review your IP records and data for accuracy

The data in your IP portfolio needs to be accurate and up-to-date, otherwise you may find that you don't quite own the rights that you think you do. Taking the opportunity to cleanse, update and rationalise your IP data can save you both time and money in the long-run, as it will identify potentially costly errors in the records.

To identify and rectify common errors, consider the following key questions:

• Exactly which entity is recorded as the owner?
• What is the status?
• Are the rights in force?
• Are licences in force and recorded against any rights?
• Are charges or other interests recorded against any rights?
• Do the registered rights match those used in the business?
• Are there any unregistered rights?

STEP 2: Audit your IP portfolio for value and efficiency

The next step is to assess the value of your portfolio against the costs involved in growing and maintaining the IP rights it contains. It helps to identify, for example, patent and trademark rights that are being renewed despite never being used, as well as gaps in protection, which might leave a company exposed.

This part of the audit should include:

• Reviewing your IP strategy to ensure that it takes into account your strategic business goals;
• Prioritising your IP rights (e.g. between ‘core’ and ‘non-core’), and markets (countries and goods/services) based on current branding/R&D strategy and future plans;
• Auditing licensing and royalty agreements to ensure that the rights have been correctly maintained and the revenues received; and
• Reviewing your supplier list to see if it is possible to generate further cost savings by consolidating your IP portfolio with one provider.

STEP 3: Put a timeline in place for regular health checks

Completing an IP audit is only the first step in what should be a regular programme of portfolio reviews. By conducting audits at regular intervals (ideally at least every six months), you can ensure that your portfolio continues to evolve as your business does. It could also identify additional savings in the future by:

• Merging registrations;
• Allowing possible duplicate (local) registrations to lapse;
• Identifying unexploited rights that could be sold, licensed or allowed to lapse.

This last step will also be crucial in light of possible changes to trademarks, patents and designs in the EU in the future; for example, following the end of the Brexit transition period.

For additional insight and advice, please download our white paper 'Best practices in trademark auditing: A practical guide'.