ALP: I've got a small business. Why would I need an intellectual property audit?

October 2006

They say that ignorance is bliss. Why go through the inconvenience and expense of performing an Intellectual Property (IP) audit, identifying IP assets and company procedures for safeguarding, enforcing, and avoiding infringement of IP? Unless one these rare situations apply, you're home free!

First, if you are not concerned with accounting for the value of your intangible assets in your company, then you need not identify the types of IP assets that you own.

Second, if the goods or processes that you use, make, sell, or import haven't changed in twenty years, you don't have to worry about utility patent infringement.

Third, if you don't bother to put a brand name on goods you produce or a service mark on the services that you provide, then you don't have to worry about running afoul of trademarks.

Fourth, if your products have no aesthetic  contours, then you don't have to worry about design patent infringement.

Fifth, if you scrupulously comply with all of those software shrinkwrap licenses, only use artwork, writings, and music from prior to the 19th century, don't use independent contractors to provide software tools, and don't market through the Internet, then you have no problems with copyrights!

Sixth, if you have no proprietary data (e.g., know how, customer lists, manufacturing drawings) and don't care if your employees help your competitors nor hire employees from competitors, then you don't need help with trade secret protection.

However, if you are the rare exception, consider doing an IP audit. You may find treasures that may be exploited (e.g., blocking a competitor, generating royalty revenue). You may also find exposure to liability. Ignorance may be bliss today, but performing an IP audit could save you from the consequences of inaction tomorrow.