6 Key Steps to Follow During Patent Portfolio Auditing

6 Key Steps to Follow During Patent Portfolio Auditing: For every company big or small, patents are extremely valuable intangible assets. A firm owning single or multiple patents can use them according to its free will. It can license them out for monetary gains or commercialize the underlying intellectual property. Hence, strategizing patent portfolios can lead to the expansion of profit margins and shareholder value. It also enhances the net worth of intellectual property.

What is Patent Auditing?

It is beneficial to investigate the internal concepts and redevelop the ideas for patenting to build a strong patent portfolio. The constant internal survey of the patentable abstraction to gain a thorough understanding of all the patents in a portfolio is called ‘patent audit’ or ‘invention audit’. The procedure encompasses all aspects such as the status of an application, the validity of the granted as well as licensed patents, and potentially patentable discoveries.

Importance of Patent Portfolio Audit

Portfolio auditing allows a company’s IP to thrive in multiple ways. The utility of portfolio audit is multifaceted and retains multiple benefits. Some of these are discussed below:

  • Identification of IP Portfolio – The most obvious importance of IP audits or patent portfolio audits is to correctly identify all the IP under the umbrella of an organisation. This will allow the organisation to better recognised which IP needs to be protected and which can provide significant turnover.
  • Optimizing business decisions – According to research, IP audits give organisations a true outlook of their existing IP assets, the value generated by them, the profits generated by them, etc. This enables business owners to make informed decisions when dealing with opportunities like licensing and acquisition offers.
  • Enhance the value of existing IP – To protect IP, companies resort to filing patent protection with patenting bodies which can be a tedious process at times. Miscalculated steps on the part of the company can jeopardize such IP protection.

Things to consider when proceeding with a Patent Audit

IP Audits can be conducted with the help of the guidelines from Intellectual Property Audit Tool. However, it is advisable to consider the following before auditing:

  1. The first step is to understand the specific needs for an IP audit in an organisation and have such an activity sanctioned by the important stakeholders – both internal and external. Several events like introducing a new product, entering a new target market, merger and acquisitions, can prompt the need for a renewed patent portfolio audit.
  2. All the patent records of an organisation need to be arranged and dated accurately to ensure achievement of the end goal of the IP audit. In a situation where patent information is not dated accurately, it can result in erroneous results in an IP audit, which can lead to serious losses for the organisation.
  3. Moreover, for regular IP audits, a well-drafted schedule and timeline need to be developed so that the IP portfolio of organisations are regularly audited based on such a schedule. This step can be done either before or after a patent portfolio audit. This allows organisations to keep better track of their existing patents and pending patent filings and grants.
  4. The next step would be to accurately document the differing needs of the stakeholders and find means of expressing them within the audit. After this, using the specified objectives of such an IP audit, an execution plan needs to be developed.
  5. A major step to follow during the process of a patent portfolio audit is to gauge the current market values and projected profitability of the existing patents. And then, weigh them against the costs of maintaining such IP as well as renewing them. It is necessary to identify, within such an audit, even the projected future market value to determine whether to maintain the patent rights for such an IP or not.
  6. The final step of an IP audit is the analysis of the audit to understand to what extent the patent portfolio is aligned with the business objective. It can sometimes result in the identification of needs for policy changes within an organisation and making decisions related to further innovations and product developments.

Conclusion

A company owning a large number of patents, which it fails to manage effectively, is similar to a wealthy person who cannot invest wisely. A well-executed audit accelerates revenue generation and manages costs by helping define a focused intellectual property strategy and work plan. To reap maximum rewards from the audit, it should be designed to provide insights into the crux of the business and its growth mechanics.

Sagacious IP offers reliable intellectual property management services to its valuable clients. Our team of experienced IP professionals ensures that businesses reap maximum rewards from their IP portfolio.

-The Editorial Team

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