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Table of Contents


An mental property (IP) audit is a technique for figuring out potential mental property (IP) belongings. An IP audit allows you to compile an inventory of your potential mental property belongings. It permits you to:

• Establish underused or underutilized belongings; and

• Decide who owns these belongings.

• Establish any related dangers, similar to mental property infringement in your half or by others.

Intellectual property auditing (IP auditing) is a administration approach used to find out the worth and danger related to mental property belongings. An IP audit assists corporations in detecting threats to their mental property belongings and helps in creating plans which assist their growth and aggressive place out there. As a result of an IP Audit examines all mental property belongings and the foundations that govern them, it assists in detecting and analyzing IP infringements. This text will present an outline of the IP Audit, its varieties and the necessity to conduct it.  


  1. Each firm could profit immensely from an IP audit. For example, a high-tech enterprise would require figuring out what patent rights it already has, what additional patents it might purchase, and the worth of these mental rights.
  2. A enterprise within the inventive sector could wish to study concerning the emblems, registered or unregistered design rights, and copyright safety accessible to safeguard its emblems and footage.
  3. An IP audit allows an organization to create or replace a listing of its mental property belongings and consider the next: 
  1. How are the mental property belongings utilized or underused?
  2. Decide whether or not the IP belongings utilized by the enterprise are owned by the corporate or by others.
  3. Decide whether or not these IP belongings infringe the rights of others or are infringed upon by others.
  4. Decide, in gentle of all of this info, what actions are essential to be taken regarding every IP asset, or portfolio of such belongings, to serve the corporate’s related enterprise objectives
  5. An IP audit goals to uncover underutilized or underused belongings, detect potential dangers to a agency’s revenue margin, and permit enterprise managers to develop educated enterprise and IP plans that may help keep and improve their place in the marketplace involved (s).
  • Value discount initiatives:

A well-managed stock of mental property belongings could help you in figuring out outdated belongings. Then, choices could also be made to discontinue paying for upkeep on outdated belongings, leading to substantial value financial savings.

  • Licensing 

It’s vital to conduct an IP audit to find out which IP belongings are important to your organization and which aren’t. Licensing decisions could then be made following this info. For example, you might choose to license a non-core mental property asset to generate further revenue.

  • Mergers and acquisitions 

When a 3rd occasion decides to mix with or purchase your organization, IP belongings will play a big function.

  • Anti-infringement actions

Understanding the worth of your mental property belongings allows you to make extra knowledgeable decisions about whether or not it’s cost-efficient to take motion in opposition to infringement and the way this may be achieved.

For example: In line with a contract entered into between Co. X and Co. Y. For 5 years, Firm X works as an worker for Firm Y. All through these years, Co. X creates quite a lot of movies for Co. Y. As a consequence, Co. Y owns the copyright to such movies. After the expiry of the contract phrases, Co. X started making movies for itself. The films have been primarily based on the identical themes and screenplays because the movies made for Co. Y. 

In such a case, Co. Y could be required to research its belongings (films/scripts) and agreements with Co. X earlier than taking any motion. Co. Y would, amongst different issues, conduct an audit to establish its rights, belongings, and dangers.


Mental property audits are categorized into the next classes.

IP audits could also be divided into three classes primarily based on their goal, together with the next:

  1. Audit of mental property for basic functions

Efficiency of this audit takes place when a brand new agency is fashioned or when an current enterprise considers implementing new guidelines or adopting a brand new advertising technique. It’s usually carried out to achieve a broad understanding of the belongings below/throughout the firm.

  • Occasion-driven IP Audit

IP audits of this sort are sometimes called “IP due diligence.” It’s used to find out the worth and danger related to a enterprise’s mental property (IP) belongings. Occasion-driven auditing is usually used within the following conditions:

  1. Throughout mergers and acquisitions and joint ventures; 
  2. Earlier than coming into right into a monetary transaction involving mental property, similar to an preliminary public providing;
  3. Earlier than launching a brand new services or products; 
  4. Earlier than contemplating IP licensing; and 
  5. Throughout chapter and layoffs.
  • Restricted-purpose IP Audit

It’s the most targeted IP audit. It’s situational and is usually used to elucidate a authorized stance or the worth of a particular mental property asset. Moreover, it might be used to explain the next:

  1. personnel turnover; 
  2. worldwide IP filings; 
  3. earlier than taking part in e-commerce; 
  4. Modifications in IP legislation and apply;
  5. “clear room” practices (designed to stop infringing third-party copyright content material); and 
  6. Litigation preparation.


Conducting an IP audit to establish if your online business has any IP is a vital first step in managing your IP. The subsequent stage is to judge the prices and benefits of looking for mental property safety for these belongings.

If you wish to entry overseas markets, you need to first defend your mental property rights in these nations. As soon as you’ve got acquired IP rights, you will must handle, protect, and successfully use these belongings to additional your organization’s general business goals. An IP Audit must be supplemented by routinely checking patent and trademark databases to pay attention to the actions of rivals and different market members.

The aim of this text is to offer a basic overview of the topic. Do not hesitate to contact specialists if you need to study extra about our Mental Property Audit. IP Specialists at HHS Lawyers and Legal Consultants are educated about mental property legal guidelines and may help you in resolving any points or considerations you will have concerning mental property.


Shahnaz Kaushar, LL.B., LL.M.

Trademark & Mental Property Legal professional

Shahnaz Kaushar is a senior Trademark and Mental Property (IP) lawyer in HHS Attorneys. A seasoned lawyer primarily based in Dubai, she has dealt with a few of the agency’s complicated, high-profile circumstances – many involving the safety of trademark and IP rights.


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