Most companies will be aware of, and appreciate the necessity and advantages of, an accounting audit. However, businesses may not have realised that it is also possible to carry out an Intellectual Property (IP) audit, and that there are certain benefits associated with this. This article explains what IP audits are, and how to qualify for a financial contribution for an IP audit from the UK Intellectual Property Office (UK-IPO).

Many SMEs are unaware of what IP they own. Even if they are aware, they may not know what IP is protectable, how to protect it, and, importantly, how to use it to generate an income. An IP audit will help a business to identify and protect its IP, and to leverage value in the IP for the generation of revenue. An IP audit will also help a business to become more aware of any risks it may be taking, for example if it is encroaching onto its competitor’s IP, and provide that business with the understanding it needs to circumvent those infringement risks.

If a company wishes to conduct an IP audit, it should consult a patent or trade mark attorney. IP audits review the business’s IP (i.e. patents, trade marks, designs, copyright, database rights and know-how), some of which the business may be unaware of. The audit will also highlight IP that is being underexploited, and focus on any areas of the business that may be completely unprotected, and therefore exposed to risk. The audit will also provide advice and guidance towards identifying and maximising the value of the IP, such that all potential IP assets are identified and appropriately managed.

A recent IP audit evaluation commissioned by the UK-IPO reported that companies who had conducted an IP audit identified a number of key commercial advantages pertaining to their business as a direct result of the IP identified by the audit. In particular, 17% of businesses reported that they were able to secure more business because of their IP assets, 20% reported greater access to grants, 23% gained greater access to equity funding due to the audit, and 28% reported financial gain which was as a direct result of the audit.

It is appreciated that some businesses may not be able to justify the expense of an IP audit, as they have more pressing outgoings. However, businesses will be happy to learn that the UK-IPO is currently running a so-called IP Audit Plus Scheme for SMEs (i.e. businesses with less than 250 employees), in which SMEs can obtain an IP audit with the UK-IPO contributing to the majority of the cost. Companies that are accepted on the scheme will receive an IP audit that costs £3000 (inclusive of VAT) for which the UK-IPO pays £2600 of the cost and the business commits to paying only the remaining £400.

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