Vicky Drew, Author at Sonder & Clay

Author Rachel Nicholls

You may be wondering “what is an intellectual property audit?” as you’ve noticed a specialist IP law firm or Trade Mark Attorney promoting this service. Intellectual Property (IP) is an important and valuable asset for any business, and it’s vital that you are aware of what IP your business owns, know whether appropriate protection has been put in place, understand the value of that IP etc. Many businesses, large and small, take the time to assess or “audit” their Intellectual Property to ensure they can make the most of their IP portfolio and realise its true value.

So, what is an IP Audit ?

An Intellectual Property audit is a tool for assessing the IP assets of a business, namely the trade marks , patents, design rights and copyright . A comprehensive IP audit will include:

Identifying the IP assets held by a business;
An assessment of the protection currently in place to protect IP;
An assessment of the current IP against the needs of the business;
The systems in place within a business to protect future assets;

The audit will identify risks to the business and provide recommendations on how such risks can be eliminated or mitigated. The audit will also recognize and protect opportunities and direct budget to where it can be used most effectively. An effective audit is based on good communication. The relevant parts of the business must all be on the same page and understand the direction of travel and this needs to be effectively communicated and understood by your IP advisors. Communicating effectively in this way ensures that the various working parts of a business are aligned and problems further down the line are avoided.

Which businesses would benefit from an IP Audit ?

In short, all businesses would benefit from an IP audit and the size of the business dictates the size of the undertaking. The sooner you conduct an audit and put the business on the right track with its IP assets the more effective the business can be going forward, however, an audit can be particularly effective at certain stages, such as:

First year of trading to make sure you are secure in what you’re doing, and that the necessary protection is put in place to continue to do so.
New product or service launches to ensure you implement the correct protection strategy.
When seeking investment or contemplating a merger or acquisition . A strong IP portfolio can make a business more attractive to investors.
When assessing and developing the overriding business strategy, an effective IP strategy can help deliver your commercial goals.

What are the benefits of an IP Audit?

We’ve already touched on several benefits, but an IP audit can further add value to your business and its future growth by:

Protecting the business

One, often overlooked, benefit of IP is to ensure the business can continue to trade and thrive with minimal risk from third party infringement. Conducting an audit will ensure that risks are identified so they are mitigated, and you are in the best position for the business to move forward.

Identifying costs savings

All businesses have a limited budget for IP so its important to make your budget work for you. An IP audit can ensure that your decisions are well informed and produce maximum value for the business.

Identifying opportunities

When managed effectively, IP can create new revenue streams. For example, An IP audit could help you to identify opportunities to licence your IP to third parties in new or existing territories.

Identifying value

IP in any business has a monetary value and it changes over time. An IP audit can aid the assessment of the monetary value of your IP, which can add to the balance sheet of the business and can be used to attract investment or as collateral to raise funds. Our Trade Mark Attorneys recommend regular IP audits to better understand your real IP value.

Assessing new markets

Before entering a new market, whether that be with a new product or a new territory you need to be aware of the risks and the cost of entering that market. An IP audit can assist with such assessments so that you can make wise decisions for your brand.

An effective IP audit will highlight any risks to your business or it’s brands and show you clearly how to use your IP effectively as a tool for business growth. If you don’t manage your IP correctly then you risk exposing your business to:

infringement of third party rights
missed opportunities for growth or expansion
valuable budget wasting.

How do I carry out an IP audit?

It is highly recommended that you engage an IP specialist to conduct and advise on an IP audit. IP Professionals have an in-depth knowledge of the various types of IP and the mechanisms for securing protection. It’s important to engage advisors that will take the time to understand your business, how you operate and your business plan moving forward.

Whilst an audit will include an assessment of the IP a business currently owns, it will also include a detailed action plan of what is required to get the business to where it needs to be.

Once an audit has been conducted it is important that it is reviewed on a regular basis, ideally on an annual basis. Once the main audit has been conducted an annual review will ensure that the IP strategy will adapt to the changing needs of the business and make sure that you continue to benefit from the time and effort invested in the initial audit.

We create real IP value

From the everyday to the IP emergency, our accomplished Chartered Trade Mark Attorneys and IP Solicitors are driven to get the very best outcome for every brief for every client, every time! Sonder & Clay are a full service IP law firm with proven expertise and results in IP protection, strategy, disputes, and exploitation. Learn more about our IP services or get in touch with us for a complimentary IP audit today.

Author Matt Sammon

Trade Mark infringement can come in many shapes and sizes, but why is it something to be concerned about? You invest a significant amount of time and energy in building your business, getting your products or services out there, telling people all about them and building relationships with customers. If all goes well you build a good brand reputation and make money. One way to look at trade mark infringement is like an anchor holding you back, your investment in promoting your brand becomes less effective and you lose custom.

In this article, we define trade mark infringement and explain everything you need to know about preventing any costly infringements within your brand’s IP portfolio.

What is Trade Mark Infringement?

Trade mark infringement is the unauthorized use of a trade mark by a third party that misleads and/or causes consumer confusion as to the origin of a product or service. It’s a frustrating and often costly matter for all brand owners.

The risks of Trade Mark Infringement

The use of an identical or similar trade mark, by a competing business, will see customers confused and engage with the wrong company, and may also lead to them being disappointed to the extent that they refuse to engage with your company in the future. This can lead to:

Loss of sales and a drop in income
Harm to your reputation and loss of consumer confidence
A drop in the value of your brand and company
Losing your market share
A leg up for your competitor

How to protect against Trade Mark Infringement

Registering your trade marks secures you a monopoly in the use of those trade marks for the goods and services for which they are registered. For further guidance, see our earlier article explaining what you can register as a trade mark.

This in turn gives you the rights to prevent the use of:

An identical mark for identical goods or services
An identical mark for similar goods or services, where the consumer is liable to be confused
A similar mark for identical or similar goods or services, where the consumer is liable to be confused
A similar mark for dissimilar goods or services, if your mark has a reputation and the use of the mark would take advantage of or be detrimental to the distinctive character of your registered mark.

If another business is using a trade mark similar to your own and it is liable to cause damage to your business then there is usually action that can be taken to prevent this.

Protecting unregistered Trade Marks

If you don’t have a registered trade mark but have used a mark for a period of time and have built a reputation then you still have a cause of action under the law of ‘passing off.’ However, your options are more limited so it pays to secure registration of your trade marks where possible and as soon as you can.

The consequences of infringing a Trade Mark?

You may have decided on a great name for your business or product, but if someone else has already secured a trade mark registration for a confusingly similar name, then you run the risk of infringing their registered rights, whether you intend to or not.

If you infringe a trade mark then you may potentially be subject to:

A court injunction to prevent your continued use of that trade mark
An order to pay damages or hand over the profits you have made from using that trade mark
An order to pay the legal costs of the trade mark owner

This is of course the worst-case scenario and usually a third party will notify you if they have concerns and allow some time to take advice and consider appropriate action to avoid these penalties. However, perhaps the biggest risk is the loss of the time and energy you have put into promoting a trade mark and the reputation you have gained.

How to avoid infringing Trade Marks

The key here is to have a search conducted and take advice before adopting a trade mark. This will help keep you out of trouble and protect your investment. If you infringe a trade mark then you may be forced to change the name of your business or products which can destroy the goodwill you have generated and result in you needing to re-invest to build the brand once again. In addition, there are costs involved in developing and implementing a new brand, not to mention the time investment required.

The best way to protect against Trade Mark infringement

The first step is to ensure that you have a search conducted to ensure that your use of a trade mark will not infringe any existing registered trade marks – then you can register your trade mark. It is important to ensure that the right marks are registered for the right goods and services. This will:

Help to ensure you can trade using these trade marks without infringing third party rights;

Protect your investment in your business and allow you to safely build your reputation;
Put you in a position to take action to prevent others infringing your trade marks;
Serve to notify others that your trade mark rights exist and will discourage them from adopting a similar trade mark.

Many trade mark infringements that we see are not deliberate attempts to copy a product or service. Whilst counterfeit goods get a lot of press many infringements are accidental and a result of companies not doing their due diligence and launching a brand without knowing what is already out there.

A trade mark doesn’t need to be in use to be effective. If you have searched your business sector online and been unable to find anyone using a similar name, this does not mean you are safe. If businesses are organized they secure registration of their trade marks before launch, which gives them the right to prevent use of a similar mark. If you go ahead and launch your business where there are earlier registered rights you may find yourself subject to trade mark infringement proceedings.

Trade Mark Watching

One way to reduce the risk of third parties infringing your rights is to head off a dispute before it even starts. Many of our clients take advantage of our trade mark watch services . It is possible to monitor trade mark applications that are being filed to identify any that are similar to your own. By challenging the application to register a similar mark you can discourage the owner from adopting that mark and launching their products or services.

Ways to deal with Trade Mark Infringement?

There are many ways to deal with trade mark infringement. In most situations it starts with contacting the infringer and asking them to stop. There is a little more to it than that as there are pre-action protocols that must be adhered which set out the information you must provide when notifying a third party of trade mark infringement. A failure to follow these protocols can have serious implications for the recovery of your costs if the worse happens and you end up having to take the matter to Court.

In the majority of cases a settlement can be negotiated that both parties are happy with. This might include ceasing to use the infringing mark, or limiting the way in which it can be used to avoid any risk of confusion.

However, if an agreement can’t be reached there are a variety of options depending on the nature of the infringement:

Take down notices – Most online retail and social media platforms, such as Amazon, Facebook and Instagram have their own trade mark infringement policies and you can submit a complaint to have infringing content removed. This is quick and cost effective, but only deals with the problem on that particular platform and can be a little like playing a game of whack-a-mole if there are multiple infringers with multiple accounts on multiple platforms.

UDRP (Uniform Domain Name Dispute Resolution Policy) – If the infringement occurs as a result of the use of a confusingly similar URL then there is a mechanism to file a claim to have the URL transferred to prevent continuing infringement. This is relatively cost effective, but only governs the use of the URL and not wider use of a trade mark.
Trading Standards – Trading Standards have powers to seize infringing goods and it is possible to notify them and have them investigate the infringement. This can be effective as it is very low cost, however, Trading Standards are underfunded by the Government and there is a limit to how many cases they can deal with and they will often focus on cases where there is a physical risk to the consumer or an avoidance of tax duties, such as counterfeit tobacco products and pharmaceutical products.
Intellectual Property Court (IPEC) – You can file trade mark infringement proceedings at the IPEC. The IPEC is a specialized intellectual property court with the aim of making Court action more accessible to smaller and medium sized businesses. Claims for damages are limited to £500,000 and claims to costs are limited to £50,000. The proceedings are more streamlined than the High Court and the case will be heard by a full-time IP Specialist Judge.
High Court – Often seen as a last resort, a trade mark infringement case can be brought before the High Court. This is a significant undertaking and involves significant costs, but there is no limit on the damages that can be recovered.

If you have concerns about trade mark infringement consult with your Chartered Trade Mark attorney or IP partner to devise a strategy to deal with the matter in a way that balances cost and efficacy. Trade Mark enforcement should constitute part of your business’s IP strategy.

We create real IP value