Copyright or patents is as much property as a building and potentialy more valuable but UK business lags behind it's international competitors in awareness.
Recently Peter Pan could be found standing up for the UK’s intellectual property rights. J. M. Barrie granted the copyright of his work to Great Ormond Street Hospital for Children in 1929 and the hospital has benefited by millions of pounds as a result. But a Canadian author, Emily Somma, has written a book using the characters from Peter Pan without the hospital’s permission. The hospital can do nothing to prevent publication in Canada, as their copyright for Peter Pan is protected by in the United States and the European Union only.

Intellectual property - inventions, literary and artistic works, brand names, and images - is everywhere and it is far from a new phenomenon. Indeed, the issue of managing intellectual property is older than Peter Pan himself: statistics on patents granted and trademarks registered were first published in Paris in 1885.
Political and economic factors may have combined to remove some of the shine from the superbrands of a decade ago, but awareness of the likes of McDonald’s and Coca-Cola has not suffered. Alongside them is the next generation: think Harry Potter, Star Trek and The Lord of the Rings.
Most UK organisations, critics argue, are not doing enough to monitor and monetarise their intangible assets.

The number of applications received by the World Intellectual Property Organisation for patents in multiple countries has exceeded the 100,000 mark in the past two years. In India applications are up by 52 per cent, in Mexico they have risen 19.6 per cent, and even the world leader in patent registration, the US, saw an 11.5 per cent rise last year. But growth and individual success stories (the likes of Philips, Sony, Nokia and Procter & Gamble lead the way in registrations) do not mean that it’s done well everywhere.
A survey of more than 300 European companies by KPMG found last year that millions of euros in potential IP revenue are untapped. The research showed that nearly 60 per cent of companies do not actively seek to generate revenue from their IP, while almost 40 per cent admit that they may be missing out on IP-related income. Among those putting a figure on it, the average estimate was €6.6 million (£4.75 million) a year in missed income.

Most worryingly, the research showed that the UK is the worst at exploiting IP revenue streams, with just 32 per cent of firms doing so. It is difficult to think of another class of corporate asset which is subject to such wasteful mamangement. Companies need to take more advantage of this underexploited asset, but do so in a realistic manner. They should monitor, review and assess their intellectual property but not necessarily expect to get rich overnight in doing so. Caution should not mean inaction.

There are many examples of companies which, often as a result of conducting an IP audit, take their brands into new areas - the Harley Davidson café is a prime example. The concept kicked off in the US in the early 1990s and in around 1999/2000 it hit the UK

HIT Entertainment has a gallery of characters including Bob the Builder, Barney the Dinosaur and the new Rubbadubbers. It values its intangible assets at 32 times its tangible assets. It was about four years ago that HIT began to recognise the value of its brands. Whereas at that time almost all of the company’s revenues were contributed by television and distribution fees, now that proportion is nearer 10 per cent as the company cashes in on merchandising. HIT realised that the real money was in rights ownership.

Many US companies conduct regular audits of IP assets. A typical US checklist would see companies conducting inventories of the IP they own and of the contracts that relate to those assets. They would also seek to confirm ownership, identify existing and potential claims and exposures and review policies and procedures that relate to its creation and protection.

A simpler approach is to work out what you own, and what value it adds, and then put a value on it. UK companies don’t have a good grip on what they’ve got but a simple annual audit would achieve all this. If you are up to date then IP is easy but most companies are still catching up. Signing off the guardianship of IP should be just as important at the year-end as signing off the finances.
As with all aspects of management, individual ownership is key. Lawyers, line managers and finance directors are common “owners”, but ultimate responsibility should fall on the finance director’s shoulders, as the natural leader for this

KPMG agrees about the need for ownership but argues that this is only half the battle. It’s all very well knowing what the intangible assets are but how do you exploit them?
To do this three basic questions need to be answered, always use a combination of the three
What did it cost to acquire the asset? What has the equivalent been sold for in the marketplace? What would it cost you if you didn’t have it?

Carrying out an Audit

The undernoted procedures assume a high level of patentable work within a company but these follow sound principles that can be adopted by any company, regardless of its activity. You are seeking to identify valuable intellectual property. · Protection of that property. · Avoidance of infringement of third party intellectual property, and particularly that of competitors. · Compliance with licenses or other grants of rights to intellectual property.
Your company's patent audit or IP team should verify on a regular basis that the procedures and policies adopted to identify and protect intellectual property and avoid infringement of third party intellectual property are being followed. In addition to such regular audits, your company should institute IP audits when:
• Your company merges with or acquires another company.
• Your company enters into a license or other transfer of intellectual property rights.
• There is a change in the law governing the acquisition or scope of intellectual property rights.
• Your company launches a new program or policy governing intellectual property.
• Your company enters a new market or launches a significant new product.
• A new competitor enters one of your company's markets or launches a significant new product

Who Should Be Included In An Audit

The scope of the audit should be closely tied to the nature of the triggering event. A merger will require an exhaustive audit, while a narrow license may only require a review of the specific intellectual property at issue. Generally, the audit may include the following departments within its scope: In-house legal counsel.,
Outside legal counsel, Sales, Marketing and Advertising. Information Technology. Research and Development. Human Resources. Purchasing. Manufacturing.

1. Patent audits

An audit of your company's patent program should seek to:
•Identify all patents, applications and unfiled invention disclosures (conduct an on-line search for patents granted to your company, review of application and invention disclosure files, contact in-house and outside patent counsel and agents).
•Identify all licenses or other grants of patent rights. These materials should be inventoried and centrally maintained (contact legal, research and development, and sales and marketing departments).
•Verify that disclosure agreements have been executed by appropriate employees, consultants, vendors, customers and other third parties (contact legal, human resources, sales and marketing and purchasing departments).
•Verify that employees are complying with their obligation to provide invention disclosures and maintain patent notebooks (contact responsible managers and review the invention disclosure and patent notebook files).
•Verify the company's title to patents (request an abstract of title from the PTO and other relevant patent offices, and contact legal and human resources to determine that assignments from employees, consultants or other predecessors in interest are complete).
•Verify that necessary fees are docketed and paid to maintain patents (contact the relevant patent offices).
•Identify possible infringement (contact legal and sales and marketing to determine if patent searches are implemented on important technology and for patents held by competitors).
•Verify that appropriate third parties (vendors, consultants) have executed indemnification agreements (contact legal, human resources and purchasing departments).

2. Trade secret audits

An audit of your company's trade secret program should seek to:
• Identify significant trade secrets (consult with research and development, manufacturing, MIS, sales and marketing and human resources; compare your company's advantages vis-à-vis manufacturing processes, raw material ingredients, information management, contacts with customers, etc., as compared to competitors).
• Verify the company's title to trade secrets (contact legal and human resources to determine if assignments from employees, consultants or other predecessors in interest are complete).
• Verify that confidentiality procedures are followed (contact security, human resources and departments that maintain the trade secrets).
• Verify that employees, consultants, vendors, customers and other third parties do not disclose third party trade secrets (contact human resources to determine if new employees and consultants agree in writing not to disclosure confidential information from former employers; contact legal, purchasing, sales and marketing, research and development, MIS and manufacturing regarding other third party agreements).

3. Trademark audits

An audit of your company's trademark program should seek to:
• Identify all marks and identifiers the company uses, or intends to use, to identify itself and its products or services in the marketplace (contact legal, sales, marketing, advertising, and any other departments involved in creating the company's image and identifiers).
• Verify that all such marks have been subject to the company's trademark development procedures: they have been properly selected, searched, cleared, approved for adoption, and screened for proper use before being put into use (contact legal and developing departments).
• Verify that any marks or identifiers developed outside the company which the company uses or intends to use are subject to licenses or assignments authorizing such use and protecting the company against claims of infringement (contact legal and any departments developing or using such marks).
• Verify that the company's marks are adequately registered in all appropriate jurisdictions (contact legal).
• Verify that any third parties authorized to use the marks do so only under adequate licenses, and that such licenses have been approved by legal and, where appropriate, registered or recorded with appropriate authorities (contact legal).
• Verify that all uses of the company's marks and identifiers are screened before finalization to assure proper use and address trademark issues in advertising, marketing, and distribution (contact advertising, sales, and marketing).
• Verify that adequate "trademark watching" procedures are employed to discover potential infringements of the company's marks and identifiers (contact legal, advertising, sales, and marketing).
• Verify that procedures are in place to address all of the above and identify and respond to any infringement issues.

4. Copyright audits

An audit of your company's copyright program should seek to:
• Identify all employees within the company who may be asked to produce materials in which the company wishes to hold copyrights, and verify that they have signed "work-for-hire" and assignment documents (contact human resources).
• Identify all third parties -- including partner companies and independent contractors -- that produce materials for the company in which it wishes to hold copyright, and verify that they have also signed such documents (contact legal, research and development, and other departments contracting with third parties).
• If the company is independently developing materials that may be substantially similar to material copyrighted by others, verify that "clean room" development procedures are established to preserve the defence of "independent creation" for these materials (contact clean room administrator and project managers).
• Once these sources of creation are identified and addressed, identify all significant materials in which copyright should be claimed and protected (e.g. source code, screen displays, procedural manuals, process lists, etc.) (contact producing departments).
• Verify that copyright notice is used for such materials and that copyright registration is sought for those materials in which full protection against copying is desired (contact legal and producing departments).
• Verify that producing departments are aware of restrictions against using copyrighted materials of others, and that proper licenses have been obtained for use of any third party materials that will not be assigned to the company outright (contact legal and using departments such as sales, marketing, and advertising).
• Verify that procedures are in place to address all of the above and identify and respond to any infringement issues.