A thorough review of your trademark portfolio now will put both your IP rights and your business in a strong position for the year to come. Assess your registrations for strength, accuracy and cost with the help of our three-step process.
Many companies estimate the healthiness 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 considered. 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, 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 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 and for obvious reasons. 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, the audit should ideally answer the following questions in relation to the IP assets being acquired:
- 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.
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 audit, 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.
Now that the UK has exited from the EU, this is also a good time to do a final review of the cloned UK rights and pending applications, and to plan for upcoming deadlines For specific guidance here, please read our Brexit FAQs.
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 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, 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 future challenges
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. If you are faced with budget cuts next year and don’t know where to start, an audit is also 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.)
Likewise, if you’re finding it a struggle to manage your network of suppliers or need to reduce costs, an audit of the work you undertake and who actually carries it out, will provide the data and knowledge needed to take steps to begin to consolidate your network and approach. (For more here, download our white paper ‘Best practices in trademark management: a practical guide’, which also compares and contrasts the in-house, outsourced and hybrid approaches to IP management.)
Find out more
Novagraaf regularly undertakes IP audits 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.