New year’s resolutions: Give your IP portfolio a fresh start with a trademark audit

The start of the year offers a perfect opportunity for businesses to review what we at Novagraaf consider to be the beating heart of most companies: the intellectual property.  A thorough IP audit will put both your IP rights and your business in a strong position for the year to come.

Many companies estimate the health and relative worth of their IP portfolios based on size alone. However, those IP rights will be worth far less if a number of checks and balances aren't also carried out. We find that many companies can reduce their spending on IP matters and ring-fence the strength of their rights by auditing their IP portfolios and ensuring there is a clear and focused IP strategy.

An IP audit and strategy must both be tailored to ensure they address the requirements of your business; a one-size fits all approach will not work. Our three-step approach will give IP holders a solid foundation to allow for an efficient and fruitful start to the year.

IP audit 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 time now 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.

The extent to which companies are diligent in the maintenance of IP and IP records can vary considerably. If a company has followed best practice, either as a matter of ongoing routine or as part of an acquisition or sale, then the portfolio should be in good shape. If rights have not been kept up-to-date, however, then they are likely at risk in terms of validity and enforceability, and should be checked and corrected. 

Updating records is a time-consuming and often costly process; fortunately, there are steps that companies can and should follow to smooth the process and minimise the demands on their internal resources. To achieve this, a review of the portfolio should ideally answer the following questions in relation to the IP assets:

• Exactly which entity is recorded as the owner of each right?
• 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?

Obtaining the answers to these questions in advance enables effective planning for any record updates that are required. For additional tips and advice, watch our webinar on IP recordals.

IP audit step 2: Audit your IP portfolio for value – and efficiency

The next step of an IP audit should be 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.

To undertake this part of the review, we would first recommend:

• 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.

Regarding this last recommendation, if you’re struggling to manage your network of suppliers or need to reduce costs, an audit of the work you undertake and who carries it out will provide the data and knowledge needed to take steps to begin to consolidate your network and approach. (For further guidance here, download our white paper ‘Best practices in trademark management: a practical guide’, which compares the in-house, outsourced and hybrid approaches to IP management.)

Likewise, if you are faced with budget cuts and don’t know where to start, this review is the perfect opportunity to put in place a risk-based maintenance/abandonment strategy to drive IP creation and annuity payments. (For additional guidance here, read our articles on patent and trademark portfolio management at times of crisis.)

IP audit step 3: Put a timeline in place for regular IP health-checks

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

• Merging registrations;
• Allowing possible duplicate (local) registrations to lapse;
• Identifying unexploited rights that could be sold, licensed or allowed to lapse; and
• Centralising IP management and technology/suppliers.

In our experience, this last step is also crucial to achieving the holistic overview that IP professionals need to make timely and efficient decisions. Read more on this topic in our article ''Designing the modern trademark department'.

Preparing for the future, today

While it is important to identify, protect and enforce the IP rights that already exist in your business; it’s just as crucial to identify those rights and territories that will become important in the future.  Your IP strategy should not merely be reactive; it should be drafted with the future in mind and adapt to the growing and changing needs of your business.

Although it is likely to be continually evolving, it is advisable to document your IP strategy in a policy document. An IP policy will generally cover the following topics:

• A clearly defined aim of how the business wants to approach IP.
• An overview of the business structure, setting out the various teams who are involved in elements of IP and how issues relating to IP are managed within the business. 
• The benefits of registering various IP rights so that this can be kept in mind when making decisions around protection and enforcement.
• The process which should be followed when developing new products or extending existing products to ensure the rights steps are taken to identify, clear and protect the relevant IP. 
• Ownership of IP, including registered rights and also considerations for vested ownership of unregistered IP rights. 
• A renewal policy with a clear overview of when registered rights should be renewed and when rights can be allowed to lapse.
• Enforcement of IP rights, including a monitoring strategy and a defined approach to enforcement. 

Consolidating your IP portfolio with one provider and working with that provider to create or update an IP policy document can not only generate cost savings but also allow for a more focused and optimised approach to your IP.  Working with one provider allows for a collaborative partnership which brings control, time efficiencies and strategic advantage to enhance your IP portfolio and deliver measurable value.

Find out more

Novagraaf regularly undertakes IP audits and drafts IP policy documents for customers, helping them to assess the efficiency of their rights, to identify gaps in coverage and to highlight areas where they could save costs. You can find out more about this service and our methodology by downloading our white paper 'Best practices in trademark auditing: a practical guide’, by contacting us below, or by speaking to your Novagraaf attorney.