The Audit And Valuation Of IP Rights

 
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Article By Philippe Péters and Pierre-Yves Thoumsin

No one can deny that intellectual property is a valuable asset. However, businesses consistently tend to underestimate the value of their intellectual property (IP) and often have an unclear view of the content of their IP portfolio.

An IP audit is an efficient and effective way of helping businesses improve the management of, and more accurately value, their IP rights.

Below we have listed some key issues to keep in mind when auditing a company's IP portfolio. These comments apply mainly to "classic" intellectual assets. However, other valuable intangible assets (such as know-how, brands and goodwill) should not be overlooked.

Securing ownership of IP rights

Employees or external consultants hired by a company are often responsible for developing creations (e.g. patented inventions, copyrighted works or registered designs). Consequently, the company should first ensure that it is the actual owner of all rights pertaining to or arising from such creations.

Clear contractual provisions are the safest way of ensuring the transfer of title, if necessary, and avoiding lengthy and costly discussions.

In the absence of such clauses, statutory provisions will apply. For instance, copyright is, as a general rule, vested in the creator of the work, i.e. the employee or external consultant. However, title to software developed by an employee is, in principle, granted to the employer.

One striking exception is the Patent Act, which does not contain any provisions on the ownership of inventions developed by employees or external consultants. Due to this dearth of statutory provisions, the courts have developed rather complex and uncertain case law, assigning ownership rights on the basis of whether the invention was totally or partially developed using the company's resources.

Timely registration and payment of maintenance or renewal fees

Intellectual property is protected on a "first come, first served" basis. It is thus important for businesses to register their intellectual assets in a timely manner, when...

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