Why Have an IP Audit?

2024 intellectual property ipaudit May 16, 2024

If you’re planning to sell or franchise your business you would benefit from an IP audit. 

An audit would uncover risks and possibilities in your business, including potential new revenue streams. 

If you’re using the IP of other businesses without permission better to discover this before you enter into a sale or franchise transaction. 

There may be steps you can take to fix the problem. Even if the problem is a significant one, there will be work arounds to explore which could preserve the value of your business. 

For example, if the brothers who started Scrabulous had an IP audit instead of proceeding to file a trademark application to register Scrabulous, they might have avoided being sued by Hasbro and losing everything overnight. 

I would have alerted them to the fact that were infringing on Hasbro's trademark rights. I'd have suggested they change their name from Scrabulous to something else. 

Like that, they could have quietly rebranded to a different name, notified their considerable fan base of their name change, and retained their first mover advantage in the market. 

As it was they were sued for trademark and copyright infringement by Hasbro, were taken down from Facebook, and it was a long time before they were able to resume their business under a different name.

In the meantime, Zinga released Words with Friends and became the market leader. 

Hopefully, fixing your IP position wouldn't require such earth-shattering actions though. It is nevertheless sensible to get an IP audit first so you can devise a suitable IP strategy for your business after uncovering hidden risks and possibilities. 

The Intellectual Property regime is designed to give researchers, inventors, and creators the confidence to develop new ideas. IP plays a crucial role. For example, by creating a temporary monopoly in which innovators are sufficiently rewarded, IP creates an incentive for R&D, leading to innovation. 

The relationship between IP rights and innovation is complex. However, what is clear is that people need to know what IP rights can do for their business and how to access them. An IP audit enables you to do so. 

It's about understanding your IP profile so you know what steps to take. Fixing your IP position is often not difficult and needn’t be too costly. However, things take time. For example, securing the rights to use a name internationally can take several years. 

By addressing your IP to identify risks and opportunities that you may have overlooked you will significantly impact your business’ value so you achieve the best possible price for your business. 

Protecting your IP is one of the most important steps to take to ensure the success of your business. So, our silver and gold UK trademark registration options include IP audits as a standard part of the work. In my view if a business comes to us for trademark support they shouldn't be left widely exposed on other IP issues that they may not know to enquire about. 

So, I recommend you consider an IP audit if you’re: 

1. starting a new business 

2. about to seek investment. 

3. envisaging selling your business in the next 2 years or so. 

4. looking to restructure and build new revenue streams such as through licensing. 

The IPO does offer grants of £2500 for IP audits. We’ve carried out many IPO funded audits. And the IPO also has an IP Access funding scheme, which provides follow-on funding for businesses to implement recommendations in their IP audit reports. They've given in excess of £2million since the pandemic. 

However, I suspect the funds would only be obtainable by high growth potential businesses, such as those using AI or similar technologies. 

If you're considering getting professional support for your trademark (you should as your brand IP is the most valuable IP your business is likely to generate) then let me know to send you our trademark email for more information. 

Also, consider subscribing to our YouTube podcast channel, which we’ve just created. There are several episodes covering business sale and IP that you might find useful to listen to to expand your understanding of IP.