Are the company's employees establishing evidence and chronology of the development of inventions in a log? Have other company personnel signed off on this? When was the invention first offered for sale? All crucial questions.
A carefully conducted audit may result in a determination that the company's use of its intellectual property violates the rights of a third party. But it is better to learn of this and have brought it to the attention of upper management than be sued without warning. Advance warning of infringement allows the company to cease infringing activities, obtain a license or at the least, evaluate its liabilities and defenses. The audit, however, may also put upper management on notice of the possible infringement, and if the infringement continues, allow for larger damages in a subsequent suit.
Like any other auditor, the intellectual property auditor will work from a carefully crafted and detailed checklist, modified for the nature of the company's business. A publisher, software developer and bio-tech company will each have different and similar issues. While the auditor should work from a checklist, novel issues will appear in almost every audit. The auditor must have the training to be prepared.
Finally, an audit should be conducted at least annually. After the initial audit, the follow-ups become easy. The cost of an audit is easily justified. First, the results form the starting point of a buyer's or investor's due-diligence, and shows that the company takes seriously its intellectual property responsibilities. Second, the audit may also capture some valuable intellectual property that is in danger of escaping the company's ownership. Finally, an audit may disclose infringement of third party rights by the company in a timely fashion so as to allow the company to be proactive.
