The Benefits of an Intellectual Property Portfolio Audit

Why Every Business Should (Regularly) Review Its Intellectual Property Portfolio

In today’s highly competitive marketplace, intellectual property (IP) is one of the most valuable business assets. From patents and trade marks to copyrights, design rights and trade secrets, intellectual property underpins innovation, strengthens branding, protects market position and drives long-term success.

Yet many companies fail to fully protect or manage their IP portfolio effectively and often overlook essential IP management best practices.

This is where an intellectual property audit (IP audit) becomes essential.

An IP audit is a comprehensive, systematic review of a company’s intellectual property assets, related contracts and IP management processes.

By conducting regular IP audits, businesses can gain a clear picture of their IP portfolio and identify what can be improved.

Better understanding helps to identify legal and financial risks, ensures compliance and uncovers new opportunities for IP valuation, commercialisation and competitive advantage.

In essence, an audit will review a company’s IP portfolio, ownership and management procedures with the goal of identifying potential risks and gaps.

It gives both clarity and direction, answering key questions such as:

• What IP assets exist?
• Who owns them?
• Are they adequately protected?
• Are they being used effectively?
• Do risks exist due to the use of third-party IP?
• Are there any gaps in protection?
• Are there opportunities for commercialisation?

By answering these questions, an audit helps shape business strategy and preserve long-term value.

Regardless of its size or industry, there are several reasons why a business should conduct an IP Audit regularly.

When should a business undertake an IP audit?

IP audits should not be reactive. They are most effective when integrated with business planning and development.

That allows proactivity – taking action early and being ready for later.

Common situations where an audit is advisable include:

• Preparing for investment or sale (i.e. planning for an ‘exit strategy’)
• Launching new products or services
• Entering new markets
• Expanding operations
• Restructuring or rebranding
• Responding to or anticipating legal disputes

An audit can also form part of a routine internal review.

For businesses with active R&D programmes or a growing brand portfolio, conducting regular audits every few years ensures strategic alignment and risk mitigation.

Understanding the scope of an IP audit

So what does an IP Audit actually entail?

An IP Audit is a comprehensive assessment of a business’s intellectual property assets.

This includes:

• Asset identification
  The audit begins by itemising all existing IP assets. This includes rights such as trade marks, domain names, patents, design rights, copyright works, etc. to the extent that such exists. In many cases, businesses own or use rights they are unaware of.
• Ownership and chain of title
  Legal ownership must be verified. The audit checks that the entity using the IP is the same as or is connected with the legal owner and that all assignments, employee inventions or third-party contributions are properly documented. Failure to address these issues can affect enforceability and commercialisation downstream.
• Protection and validity
  The audit assesses whether rights are valid and enforceable. This includes reviewing registration status, examining whether trade marks are distinctive and checking whether patents meet current maintenance obligations. All key renewal dates are identified and lapsed rights are flagged.
• Contractual agreements
  Agreements related to IP are reviewed in detail. This can include, for example, such documents as undertakings given to third parties, assignments, licensing agreements and joint venture agreements. The audit identifies terms that may affect control, transferability or value of the IP assets.
• Third-party risks
  The audit examines whether the business is using third-party IP without proper authorisation. It may also include clearance searches or a review of previous disputes. Exposure to infringement claims is a key risk area.
• Commercialisation opportunities
  Many businesses hold IP assets that are underused. The audit can identify opportunities for licensing, franchising, sale or other revenue-generating arrangements.
• Internal processes and governance
  The audit looks at how IP is managed. It examines who is responsible, whether proper policies exist and how decisions are documented.

One of the primary benefits of an IP Audit is the identification and valuation of intellectual property assets.

Many businesses are simply ignorant of what they own and are unaware of the full extent of their IP portfolio, in particular, if they have acquired IP through mergers or acquisitions.

An IP Audit helps to bring all the IP assets together and to be recorded internally.

This gives the business a clear picture of what it owns.

Additionally, understanding the value of these assets is crucial for several reasons.

For one, a business can leverage its IP in negotiations, secure financing or even monetise unused or underutilised IP through licensing or sale.

An accurate valuation also plays a vital role in assessing the company’s overall worth – particularly in the context of mergers and acquisitions.

Ahead of a merger or acquisition the IP Audit plays a critical role in establishing ‘due diligence’ and immeasurably helps any interested party seeking to own or invest in a business.

An IP Audit not only identifies a business’s existing IP assets but it can also uncover opportunities for future innovation. For example, the audit may reveal underutilised patents or technologies that could be further developed or commercialised.

Stevens Hewlett & Perkins: Your Partner in IP Audits

Whether your business is preparing to launch new products, expand into international markets or attract investment, an IP audit provides the necessary clarity and direction.

By conducting regular audits into your IP management best practices, you ensure that your most valuable intangible assets are protected, compliant and working to deliver maximum return on investment.

At Stevens Hewlett & Perkins, we specialise in conducting IP Audits for businesses of all sizes. Our experienced intellectual property attorneys have the expertise to identify, protect and manage your IP assets. We want to help your business by ensuring it is well-positioned for market success from an IP-perspective.

If you are considering an IP Audit then don’t hesitate any longer  – contact us now. You will be glad you did. Our team is ready to provide the expert advice and support you need.