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1.1 Identifying Intellectual Property Assets
1.2 Plan Your Protection Strategy
1.3 Timing of Intellectual Property Audits
1.4 Summary

Just as financial audits are an important tool used by companies in examining and assessing their financial situation, technology audits are used to examine a companies’ technology or intellectual property situation. Regrettably, some companies focus only on their tangible assets, such as buildings, equipment, inventories, etc., and overlook intangible assets, such as patents, trademarks, copyrights, and trade secrets, commonly referred to as intellectual property. Yet, with start-up and hi-tech companies, the intangible assets may be their most valuable holdings.

Technology audits can help a company to discover the scope of its intellectual property ownership rights and develop a sound procedure for protecting its technology assets. Important elements of a technol-ogy audit include: identifying intellectual property assets, developing and reviewing plans for protecting these assets, and timing of audits appropriately.

1.1 identifying intellectual property assets^

The term "intellectual property" is commonly used to refer to patents, trademarks, copyrights, and trade secrets. In general, intellectual property can be defined as technology, creative work, or proprietary information that is capable of giving a company an advantage in the marketplace. In addition to identifying intellectual property assets that already exist, it is very important to identify intellectual property assets that are under development. The following briefly introduces the main forms of intellectual property.


A patent is a legal document issued by the government granting the patent owner the right to exclude others from making, using, offering to sell, selling, or importing the invention claimed in the patent. Patents can be obtained for inventions that are new, useful, and unobvious to persons knowledgeable in the field of the invention. Processes, machines, products, compositions, or ornamental designs may be patented.


Trademarks are typically words and symbols associated with a company’s goods or services which distinguish them from those manufactured or sold by others. A trademark or service mark must be capable of indicating the source or origin of the goods or services.


Copyrights protect the particular expression of a thought or idea in the form of words, music, computer software, choreography, pictures, sculptures, audio-visual works, and sound recordings. Unlike patents, copyrights do not protect the idea itself, only the expression of the idea. Further, copyrights do not protect against true independent develop-ment by another.


Trade secrets include information that is not generally known within the trade or industry and that provides a competitive advantage. Trade secrets must be maintained secret. If a trade secret is publicly disclosed, it is no longer a trade secret.

The first step in identifying intellectual property assets is to list all intellectual property rights which the company owns, such as issued and pending patent applications, registered and unregistered trade-marks (including distinctive "trade dress"), registered and unregistered copyrights, and trade secrets.

Trade secret technology, including the ideas and concepts that may be the subject of future patent and trademark applications or copyright registrations, should be examined and identified. This information may exist in the form of invention disclosures, lab notebooks, research and development progress reports, formulas, product reports, engineer-ing drawings, manufacturing processes, customer and supplier lists, and technical and business plans. Other trade secret information may still be in the minds of key personnel who should be interviewed.

Technology that is licensed from third parties should also be considered in a technology audit.

If you are uncertain whether you are able to adequately identify your intellectual property, an intellectual property attorney can assist you. If you would like Austin Rapp & Hardman to conduct such an audit, please contact us by telephone at (801) 537-1700, by fax at (801) 537-1799, or by email to info@mmlaw.com.

1.2 plan your protection strategy^

Once all intellectual property assets have been identified, you can now develop a plan for protecting those assets. Various approaches for protecting patents, trademarks, copyrights, and trade secrets are discussed in this handbook. You should customize a plan for protect-ing your intellectual property assets so it is cost effective and makes sense for your business. Again, an intellectual property attorney can be very helpful in assisting you with the formulation of a strategic plan.

1.3 timing of intellectual property audits^

Like financial audits, intellectual property audits should be performed regularly and periodically. An annual intellectual property audit would be reasonable, but there are other circumstances where a special intellectual property audit should be performed. For instance, a thorough intellectual property audit should be performed before a merger or acquisition of major third party assets. This can ensure that there are no limitations on any acquired intellectual property rights that could encumber the use of those assets. An intellectual property audit is also recommended when a company goes public, when it seeks venture capital or other major financing, or when changing intellectual property counsel.

A focused intellectual property audit should be performed before a new product is publicly disclosed or offered for sale to be sure any intellectual property related to the product and its manufacturing process is adequately protected. In some instances, public disclosure results in forfeiture of intellectual property rights related to the product.

1.4 summary^

The value of intellectual property assets in obtaining and maintaining a competitive advantage in the marketplace is continually increasing. Intellectual property audits can help a company to discover the scope of its intellectual property ownership rights and to develop sound procedures for protecting its technology assets.

This handbook is designed to help you evaluate your intellectual property and recognize the various ways that your property can be pro-tected. The authors of this handbook recognize that, to many people, protecting intellectual property can seem overwhelming. To assist you in your efforts to protect your intellectual property, the authors have included an Intellectual Property Prospector’s Kit at the end of this handbook. This kit will help you begin to analyze your company’s intangible assets. The forms in the Intellectual Property Prospector’s Kit should be filled out by those most knowledgeable about the product or idea they relate to. They can help you and your intellectual property counsel more effectively categorize and track your intellectual property.