Audit

An audit is an operation consisting of investigations and verifications in order to identify and evaluate the nature and extent of a company’s intellectual property rights, which makes it possible to assess the rights holder’s monopoly of exploitation over its assets.

The Intellectual Property Code covers the two branches of intellectual property, namely industrial property and literary and artistic property, and provides for a legal regime specific to each type of creation.

The audit operations allow to proceed to the analysis of all the intangible assets that belong to the company. and are used by the company and in particular: distinctive signs such as trademarks, designs, company names, patents and other domain names, the sui generis rights on the databases, the image rights etc…

The first step of an audit operation is to determine the precise activity of the company, but also its potential development projects.

Then, it will be appropriate to:

• Determine the territory(ies) of interest for the company’s activity, including possible expansion projects abroad;
• Determine which identifying signs, creations and/or any other elements are eligible for protection under the rights of intellectual property, which are used by the company in the course of its business and for which it could be the exclusive owner, and those for which it would be necessary to request an operating license;
• Research and verify the nature, the mode of use and the scope of each of the different registered titles (trademarks, designs, company names, etc.), as well as the different contracts concluded by the company relating to the above-mentioned elements (license, franchise , etc.);
• Identify potential gaps and inconsistencies in the company’s intellectual property portfolio in relation to its business and projects;
• Propose a strategic action plan aimed at regularizing, if necessary and as far as possible, the problems identified and at optimizing and enhancing, in a general way, the company’s intellectual property rights in the long term and according to its development strategies.

This strategy can include various steps, including: drafting of contracts for the transfer of securities (transfer of copyright, transfer of trademark rights, image rights, etc.), the drafting of license agreements, the realization of a search for prior art, the registration of trademarks, the establishment of trademark monitoring etc…

At the end of the audit, a complete analysis report is drawn up, taking stock of existing rights, identifying any problems and risks, and proposing a strategy for optimizing the protection and management of the company’s rights portfolio.

Audits of a company’s intellectual property rights can occur at any time and for a variety of reasons.

It can be a one-time audit in the context of a particular event: merger and acquisition of companies, change of management of the company, change of identity of the company…

In addition, audits can also be carried out on a regular basis, outside of this type of exceptional event. This is highly recommended to ensure that the company’s rights are always adapted to its field of activity and its projects.

Indeed, a portfolio of intellectual property rights is by nature never fixed and is bound to evolve over time, just like the law that governs these rights.

For example, a creation can be protected today by copyright, and become commonplace in several years because of the loss of its original character.

In the same way, as far as trademarks are concerned, a distinctive sign may initially benefit from a strong power of attraction and then become generic or descriptive of the good(s) and/or service(s) it designates, particularly in the event of degeneration.

On the other hand, an intellectual property title that is subject to a large number of counterfeiters in one or more countries, especially on the Internet, and poorly defended by its owner, will be weaker than a title that is actively and continuously defended (notably through counterfeit seizure, of infringement actions, etc.).

Finally, such an audit, if carried out internationally, requires taking into account the different legislation of each country in this area.

For example, an intellectual property title can be defended:

• Through the administrative channel before an Office (INPI, EUIPO, WIPO). It is recommended to be accompanied by a counsel specialized in the field (CPI) or by a lawyer to initiate such actions;

• By legal proceedings before a Court or Tribunal. In such cases, legal representation is mandatory and the costs of such proceedings are more expensive.

Thus, the performance of an audit necessarily implies analyzing a great deal of information and taking into account a multitude of parameters relating in particular to the situation of the asset within the company, its position on the market in question and the legal system applicable in the territory(ies) concerned.

To do this, it is strongly recommended to be accompanied by lawyers specialized in the field of intellectual property and the valuation of intangible assets in order to benefit from their complete expertise and advice on the valuation and management of your intellectual property portfolio, the possible amicable solutions and the risks of litigation.

Focus on the importance of audits

Intellectual property rights are essential assets to the business and economy of a company.

It is therefore essential to ensure that the company has all the intellectual property rights necessary for its activity. This is precisely the purpose of audits.

In practice, in the vast majority of cases, audit operations make it possible to identify gaps or inconsistencies that require adjustments and thus optimize the valuation of your rights.

The Bouchara firm assists you in particular in :

• The realization of operations of audit of intellectual property rights punctual and regular;
• The implementation of optimization strategies for intellectual property portfolios (protection strategy, financial strategy, etc.);
• The realization of all the steps recommended in this strategy;
• Filing of your intangible assets before the Intellectual Property Offices in France and abroad (INPI, EUIPO, WIPO);
• The follow-up of the registration procedure of your intangible assets;
• The protection, management and defense of your rights against third party infringement(opposition, nullity action, seizure, infringement action, unfair competition action etc.).