In the course of conducting an intellectual property audit, the audit team discovers that few employees are subject to written agreements with the company although many have access to highly proprietary information. More

Notwithstanding the importance of Intellectual Property (IP), businesses have overlooked its value until fairly recently. In the earlier times, business strength was focused on tangible assets, with intangible IP being relegated to mention in footnotes. The internet business boom and government regulation changed business thinking. Now companies more typically recognize the importance of IP in business decisions and transactions, and that recognition has increased the demand for IP audits. An intellectual property audit is a systematic review of a company's IP assets and related risks and opportunities. IP audits can help assess, preserve, and enhance IP; correct defects in IP rights; put unused IP to work; identify risks that a company's products or services infringe another's IP; and implement best practices for IP asset management. A thorough IP audit involves not only a review of a company's IP assets, but also the company's IP-related agreements, policies and procedures, and competitors' IP. Another type IP investigation is usually conducted when a company acquires another entity. At the time, a thorough investigation is usually conducted of the intellectual property of the target company to ensure that the acquiring company will obtain the benefits of what it is paying for and will not inherit infringement suits and other problems stemming from the target's failure to protect its intellectual property. This type of intellectual property investigation is acquiring and its counsels have an obligation to duly and diligent investigate the target's assets. The IP Audit requires : Researching background information of the business Preparing an IP Audit plan IP information analyses to ascertain if the company owns all the intellectual property of the concern and whether the company infringes on the intellectual property rights of other in the conduct of its business. IP evaluation is done through different valuation technologies including replacement value, discounted cash flows and comparable sales. Further, the client has to be told that the IP Audit requires auditing different contracts/ agreements including licensing agreements, assignment agreements, employment and independent contractors' agreements, joint venture and collaboration agreements. In summary, an intellectual property audit can have a meaningful role in avoiding the violation of others' rights, protecting one's intellectual property rights, minimizing the risk of forfeiture of rights, clarifying ownership issues, and educating employees.