The Intellectual Property Audit – Finding What You Have (Part III of V)

Approach of an Intellectual Property Audit

Every IP audit should focus on four key areas. First, the lawyer conducting the audit needs to identify all intellectual property assets within the audited organization. Second, the lawyer must identify any problems that exist with the ownership of the intellectual property. Third, the attorney must identify any defects in title or enforceability of the organization’s intellectual property. Finally, the lawyer must identify any unprotected intellectual property assets.

Identification of Intellectual Property Assets

In identifying all of an organization’s intellectual property assets, a lawyer focuses on “…identifying the subject matter of the intellectual property, how it functions, and how it manifests itself in the organization.” Different types of organizations emphasize different types of intellectual property, depending on the organization’s purpose. An arts-based organization should have copyright protection, but may have very few, if any, patentable inventions or trade secrets. A manufacturing or technology-based organization, on the other hand, must rely heavily on patent and trade secret protection and less on copyright protection. It is likely that most organizations have logos and other trademark elements.

Identification of intellectual property problems

To identify any issues that may exist with the organization’s intellectual property ownership, the attorney conducting the intellectual property audit attempts to trace the chain of ownership of the intellectual property back to its creation. The attorney seeks assignment agreements for employees, former employees, contractors, strategic partners, acquired companies, and others who may have rights to the intellectual property if not assigned. This is especially true for patents, where, in the United States, the inventor owns all rights to “…preclude others from making, using, offering for sale, or selling the invention in the United States or importing the invention.” to the United States”. United States and, if the invention is a process, the right to exclude others from the use, offer for sale, or sale in the United States, or importation into the United States, of products made by that process, referring to specification of the details thereof.” It is possible in some other countries for an organization to be named the inventor on a patent; in the United States, the inventor must be one or more human beings who can then assign the rights to the patent to a This is also true of copyright, where independent contractors and consultants retain copyright in materials affixed to a tangible medium unless otherwise agreed.

The attorney conducting the intellectual property audit also examines the agreements that exist between the organization’s employees and the employees’ former employers. New employees may present an intellectual property issue if they violate a former employer’s non-compete/non-disclosure agreements by assigning the rights to any new invention to their current employer. Therefore, the intellectual property attorney should investigate previous employee non-compete/non-disclosure agreements.

Identification of Defect in Title or Protection of Intellectual Property

The attorney conducting the IP audit must identify any assets that are entitled to more protection than they currently enjoy. In some cases, such as patents, key protection can be lost forever if the organization postpones the decision to register for too long. Often this is a problem because the invention, while it should be perfectly patentable, has reached the legal limit of patent law because the inventor disclosed or used the invention in public more than a year before the organization applied for the patent. . However, an inventor may consider his invention to be perfectly obvious when in fact it is patentable. The attorney may also identify valuable trade secrets that the organization should protect more carefully than it does.

Identification of Unprotected Intellectual Property Assets

Often, copyright and trademark protection can be based solely on common law because the owner does not register the intellectual property with the appropriate agency. However, an inventor may inadvertently invoke a patent law estoppel and render his or her invention unpatentable. This can cause problems down the road for the organization when trying to enforce its intellectual property rights because certain intellectual property rights (especially patent rights) cannot be enforced unless the asset is registered with the government agency or agencies. corresponding. Ultimately, the failure to register a portion of the IP may decrease the value of the IP itself. The attorney should identify any of these issues and bring them to the organization’s attention. So the organization may want to remedy a problem if it can (in the case of patent registration, the organization may not be able to obtain registration due to the one-year statutory ban). The lawyer should also identify any problems with the registration of the licensing or change of ownership of the intellectual property. An organization’s failure to register such changes may result in a second licensee taking precedence over the organization as the first licensee if the organization fails to provide notice through registration. Under US patent law, this notice has a 90-day look-back period. Proper registration also ensures that full remedies for the violation are available.

Copyright 2003, 2007, Nancy Baum Delain. All rights reserved.

Continued in Part IV.

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