IPR audit Checklist

Intellectual Property Audits and Due Diligence Reviews:

Clients are often unaware that they own valuable assets: their intellectual property. They may use distinctive names for certain products or services , may possess creative marketing materials , or may have developed a novel method of conducting business. All of these developments are assets that can and should be protected as intellectual property. Distinctive names should be registered as trademarks, written materials should be protected by copyright notices and registration, and trade secrets should be protected so they can endure perpetually.

Many companies believe that copyright extends only to important literary works and therefore fail to secure protection for their marketing brochures or other written materials. Similarly, companies often fail to implement measures to ensure valuable trade secrets maintain their protectability. Because clients are often unaware of the great potential and value of this property , law firms often offer their clients an INTELLECTUAL PROPERTY AUDIT to uncover a company’s protectable intellectual property. This IP audit is analogous to the accounting audit most companies conduct on an annual basis to review their financial status.

INTELLECTUAL PROPERTY AUDIT QUESTIONNAIRE:

Identified below is a list of subjects to be covered in connection with the review of intellectual property rights of your company ( “ the Company”). Please gather any materials and documents relevant to the subjects listed below so they can be reviewed. If no materials or documents exist with respect to a particular subject, please confirm that in writing next to the relevant question.

For all relevant questions, give the name of the person who assisted in the design , development , or implementation of any intellectual property rights; describe the nature of the relationship between the person and the Company ( for example, employee, independent contractor , and so forth); and indicate whether the person signed any confidentiality or nondisclosure agreements with the Company.

A.    General

1.     Has the Company ever acquired another entity or the business or assets of another entity or person?

2.     Has the Company ever sold any assets or business to another entity or person?

3.     Is the Company engaged in the development or design of any useful products or parts for useful products?

4.     Is the Company engaged in the development, design or modification of computer software?

5.     Are there any individuals who may have developed or designed products or software for the Company who have left employment with the Company? If so, indicate whether each such person signed a confidentiality, nondisclosure, or employment agreement with the Company?

6.     Does the Company have a website or are there links from other parties’ sites to the Company’s site? If so, provide website addresses.

7.     Does the Company use a docketing system or calendar to provide reminders of due dates relating to any of its intellectual property?

B.    Trademarks and Service Marks

1.     Does the Company use any trademarks, service marks, logos, slogans, or designs ( collectively “Marks”) in connection with the offer and sale of its products or services? These Marks may have been displayed on products, labels, packaging , letterhead , business card, in advertisements , brochures, or other marketing materials including a website.

2.     Has the Company ever applied for registration of any Marks with the United States Patent and Trademark Office( PTO) or any state trademark agencies?

3.     Has the Company ever allowed another party ( such as an employee, client, vendor , or competitor) to use any of the Company’s Marks?

4.     Does the Company use any Marks that are owned by any third party? Review Company marketing materials , website, and other written documents to determine whether the Company displays or uses Marks belonging to another.

C.    Copyrights

1.     What written materials does the Company use to advertise its products and services? These may be written materials, scripts or copy for radio or television advertisements , or web site materials. Were these developed by Company employees or by independent contractors working for the Company? What agreements exist relating to the development of such materials?

2.     What written materials does the Company use internally , such as employee handbooks, training materials, company policies, or manuals relating to the way the Company conducts its business?

3.     Do Company employees prepare written materials or electronic materials( such as powerpoint slides), when presentations are made within the Company and outside the Company? If so, describe.

4.     Do Company employees submit articles for publication to any journals, periodicals, or other publications? If so, describe.

5.     Has the Company ever applied for registration of any copyrights with the U.S Copyright Office?

6.     Are articles  from periodicals , magazines , trade journals, and other related written materials photocopied for distribution within the Company?

7.     What policies exist regarding reproduction of books , articles, journals, and other materials that may be subject to copyright?

8.     Is any music piped in through the Company’s offices( whether through the use of CDs or music being simultaneously transmitted by a radio station)?

9.     Is music played when callers to the Company are placed on hold?

D.    Patents

1.     Has the Company or its employees ever invented any useful article, product , method, process , or software? If so, do any inventor or laboratory notebooks exist that document the development of the invention?  Does the Company have any present plans for any such inventions?

2.     Has the Company ever made any improvements to another party’s useful article , product , or invention?

3.     Has the Company ever engaged in the reverse engineering or decompilation of another company’s product or software?

4.     Has the Company ever applied with the PTO for issuance of any patent?

E.    Trade Secrets:

1.     What information does the Company possess that would be harmful to the Company if it were discovered by a competitor? Consider proprietary information relating to research and development plans; calculations and financial data; employee manuals and handbooks and personnel information; information relating to the Company’s clients and customers; the Company’s methods of recruiting; methods and processes of production; test results for Company products and services; data concerning the pricing for Company products and services; sales forecasts; research information; manufacturing information; marketing materials; surveys and data relating to customer needs and preferences; and business plans and forecasts.

2.     Do employment or other agreements exist that protect such proprietary materials?

3.     Does the Company conduct employee orientation for new employees and exit interviews for departing employees to ensure employees understand the need to maintain confidentiality of Company trade secrets?

4.     What measures does the Company take to protect confidential and proprietary information? Are documents marked “Confidential”? Are proprietary materials kept  in locked cabinets? Are restrictions placed on the access to and copying of such materials?

5.     What measures does the Company take to ensure electronic communications are protected and secure? Are any encryption methods in place for electronic communications? Describe restrictions on access to the Company’s computer systems.

6.     Are any legal notices or disclaimers provided at sign-on when Company employees access the Company server or network?

F.    Software:

1.     Has the Company designed, developed or modified any software?

2.     Does the Company have the right to use any software designed or developed by another party? If so, have licenses been obtained for each user?

3.     Does the Company allow its employees to copy any software for their home use?

G.   Claims:

1.     Are there any presently pending claims relating to any of the Company’s intellectual property? Has any person alleged or claimed that the Company has violated or infringed its intellectual property rights?

2.     What claims have been made( whether or not resolved or compromised) within the past five years against the Company relating to alleged infringement or violation by the Company of the intellectual property rights of others?

3.     Has the Company observed  or made any claims relating to any possible infringements by others of the Company’s intellectual property rights?

4.     Does the Company use any methods to detect possible infringing uses of its intellectual property?

H.    General Documents

1.     Please assemble all applications and registrations , and all license , royalty , security agreements or other agreements relating to trade names , Marks, copyrights, patents , trade secrets , software , licenses, or other similar rights relating to the Company’s intellectual property rights.

2.     Please assemble all agreements entered into by employees ( including officers and directors) and any Company handbooks , manuals , or policies relating to Company employees

3.     Please assemble all agreements entered into between the Company and any consultants or independent contractors

4.     To the extent not already covered , please assemble all agreements or licenses entered into between the Company and any other parties that relate to the Company’s intellectual property,which are essential for the operation of the Company’s business , or which the Company is allowed to offer or use another party’s Marks, copyrights, patents, processes, software,or other related property

5.     Does the Company offer its products or services in any foreign countries? If no, does the Company have any plans to offer its products or services in foreign countries within the next three years?

Postaudit activity:

After the inspection is completed , the legal team will usually prepare a written report identifying the specific items of IP owned by the Company, reviewing their status, and making recommendations for protection. The IP audit team may then proceed to take the following actions:

-          Filing applications for registration of trademarks, service marks, copyrights,and patents

-          Drafting contracts to be used when the company retains independent contractors ( to ensure that ll work created by the independent contractors is “work made for hire” or is owned by or assigned to the company)

-          Preparing license agreements so the company can license its intellectual property to others

-          Preparing nondisclosure and non-competition agreements

-          Preparing policies for the protection of trade secrets

The IP audit team may also assist the client’s human resource department and provide instructions on conducting exit interviews and may redraft the employee manual to include a trade secret policy, internet use policy, and instructions regarding use of the company’s trademarks.

The legal team may help the company initiate a docketing system for reminder dates for renewals of licenses and trade mark registrations or may be retained to perform the  docketing functions itself