Posts Tagged ‘trademarks’

The Strategic Management Of Intellectual Property Rights

Thursday, May 12th, 2011

Our guest this week is James Minns, senior counsel at Shibley Righton LLP.  He serves as leader of 3 practice groups: the Intellectual Property Practice Group; Media, Arts & Entertainment Practice Group; and Insurance Practice Group. He is a top legal mind in the area of copyright and rights protection, and has represented major clients in technology, media and telecommunications.

What are Intellectual Property Rights (IP) and why are they important?

Intangible assets such as patents, trademarks, copyright, industrial design and trade secrets have become an increasingly important and valuable part of trade and commerce in our modern economy.  The strategic management of intellectual property rights (IP) has to be top of mind for business owners and managers in all manner of commercial transactions.

Why do you need IP Audit?

The strategic management of IP begins with an IP audit which allows management to determine the scope of the company’s ownership interests in various assets, set their fair value, and to make informed decisions on future actions and transactions.  The necessity of protecting your intangible assets becomes more pressing as the company expands, enters into complicated transactions with global third parties, and as more goodwill becomes attached to the company’s name and its products.

What is an IP audit?  An IP audit is a systematic identification, review, and evaluation of all the IP owned, used, and proposed to be used in and/or acquired by a company.  The overall purpose of an IP audit is to identify and assess all of the company’s intangible assets in order to conduct a SWOT analysis to determine the valuable core assets and optimize their usage through a systematic long-term strategy.

What is the IP Audit Process?

The steps that are involved in an IP audit include information gathering through data collection and personal interviews.  Data collected might include copies of product brochures, product notes, advertisements, release notes, signage, labels, tags, and assorted agreements. They will also include documents such as marketing files, federal registrations, foreign registrations, government contracts, license and maintenance agreements, consultant agreements, employee agreements, distribution agreements, supplier agreements, and purchase orders.

Information gathering is followed by a process of research and review.  Consideration is given to registered and unregistered IP. Federal registrations are not necessary in order to assert ownership interests in IP. Actually, it is imprudent to register all of your intangible assets since not all the IP will be worth the investment.  Registrations are valuable in that they give rise to a presumption of ownership and provide a broader scope of protection.

Searches should be conducted to reveal any pending or threatened litigation or other proceedings against the company’s IP rights. It is important to effectively deal with such proceedings in the early stage as they could get more complicated with time and significantly lower the value of a company’s IP.

All the relevant contracts or agreements will be reviewed to assess whether they provide adequate protection to the company’s intangible assets and whether they protect the company from infringing against third party rights in IP.

Some questions to consider.

All the information gathered from the data, interviews, searches, and review will be consolidated and analyzed to properly evaluate the company’s IP rights and make informed decisions. The following are some of the questions that may be considered at this stage:

  • Given their strengths and weakness, what is the value of the intangible assets?
  • What are the core intangible assets and how should they be managed and developed?
  • What are the intangible assets that should be abandoned given their weaknesses and/or risks?
  • Do some product offerings infringe the rights of third parties? If so, how much alternation in the design is necessary in order to protect the company’s products against infringement claims?
  • Could we use variations of our trademarks without losing their distinctiveness?
  • If others are using variations of our intangible assets that infringe on our rights, how should we approach these problems?
  • Are there unregistered intangible assets that should be further protected through registration? What are the assets, if any, that no longer require the protection of registration?
  • How can we effectively protect our confidential information through contractual provisions?
  • How can we effectively protect our ownership interests in our intangible assets as against our employees and consultants?
  • What would be the most effective means of storing, organizing, and presenting the data on intangible assets?
  • Is a tickler system necessary so that the company personnel may be alerted of important dates in relation to IP registrations?

The outcome and benefits.

The final product of an IP audit is a catalogue of registered and unregistered intangible assets that would allow for a quick reference to discern their registration status.  A written report will be prepared summarizing the results of the IP audit. Recommendations will be made in relation to strategies to minimize IP risks and to maximize, protect and enhance the value of the company’s IP.

You can contact James at 416-214-5259 or at jeminns@shibleyrighton.com

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