The past two decades witnessed a dramatic rise in the value of intellectual property assets. Those assets—such as trade secrets, patents, and trademarks—now comprise an essential part of the bottom line of most enterprises. While not all forms of these assets are important to all companies, some forms of IP are vital to every enterprise.
Copyrights—once viewed as the domain of Hollywood and the music industry—are now recognized as valuable assets by banks, manufacturers, and retailers. So, too, with trade secrets—often a company’s most valuable form of intellectual property. Every enterprise has trade secrets—or believes it does until it learns otherwise in court. And in the 21st Century, every company has become a publisher as a result of its website, and suddenly finds itself subject to the types of liability risks—such as libel and invasion of privacy—that once bedeviled only the newspaper industry.
Unfortunately, too many companies discover the value of their intellectual property at the moment they lose it, often to a competitor. These losses are often avoidable, but protection requires:
To address these concerns, Capes Sokol offers the IP Audit for the benefit and protection of its valued clients.
An intellectual property audit is a systematic and efficient review of a company’s IP assets, including risks and opportunities.
Sure. Let’s take trade secrets—which typically are among your enterprise’s most valuable IP assets. Indeed, they are often more important than a company’s other forms of intellectual property.
As the name suggests, a trade secret is a piece of confidential information that provides an enterprise with a competitive edge. Trade secrets include everything from marketing plans and customer lists to financial information (pricing, overhead, profit margins) and manufacturing processes. Think of the third base coach making all those mysterious hand signals to the batter and the runner on first base. Those hand signals are the team’s trade secrets. And, of course, there’s the formula for Coca-Cola, regarded as one of the world’s most valuable trade secrets. If you visit the company’s headquarters in Atlanta, you can even see the vault where the legendary formula is secured.
But as the name indicates, for a trade secret to be deemed a trade secret, it must be secret. And the burden of maintaining that secrecy is placed upon the company that owns it. Once publicly disclosed, a trade secret is—quite literally—no longer a trade secret.
In 2016, Congress enacted the Defend Trade Secrets Act (“DTSA”), which federalizes trade secret law and provides companies a clearer path to enforce their trade secrets. But, as with the preexisting laws in the fifty states, a company has to demonstrate to the court that it has taken reasonable steps to keep such information secret. Those “reasonable steps” include appropriate confidentiality language in the company’s employment agreements, consulting agreements, and contractor agreements. And to take full advantage of all the remedies provided under the DTSA, those agreements and the company’s manuals have to include a special new notice regarding “whistleblower” protections.
Thus, it’s important to make sure a company’s agreements meet the requirements for protection of its trade secrets under the new federal trade secrets law.
It all depends upon your enterprise, including its size and the scope of its operations. For some, an audit reviews the procedures used by the organization to obtain and protect its intellectual property and to protect itself from infringing the intellectual property of others. For others, the audit includes an attempt to evaluate and/or identify defects in the existing intellectual property assets.
Thus, the first step in the audit is to determine its scope, which involves a discussion with the Capes Sokol attorney who will perform the audit. That discussion usually leads to interviews by that attorney with knowledgeable persons within the company and a review of key documents. We schedule those interviews at convenient times and conduct them efficiently.
When that is complete, the attorney will prepare an audit report, a draft of which will first be shared with the executive who authorized the audit for review and comment.
Again, it depends upon your enterprise and, just as important, the format that you believe will be most helpful and most instructive for your organization.
We conduct the IP Audit on a fixed-fee basis. The cost depends upon the size of your organization and the scope of its intellectual property. The actual fee will be discussed and established before the Audit starts.
Mike, Chair of the firm’s Intellectual Property Practice group, heads the Capes Sokol I.P. Audit Team. He concentrates his practice in copyright, trademark, First Amendment and media law, including libel and privacy rights. He is a widely recognized trial lawyer in the area of general commercial litigation, and regularly advises clients on a range of intellectual property matters.
For more information about Mike, please visit his profile.
Sarah is passionate about representing individuals and closely-held businesses of all sizes and in all stages of growth in corporate and transactional matters. She focuses her practice on the resolution of complex legal matters that affect businesses in a variety of industries – particularly those involving ownership disputes and deadlocks, succession planning, buy-sell agreements, and business divorces.
For more information about Sarah, please visit her profile.
The content on this post does not constitute legal advice, may be geographically or time sensitive, and is for informational purposes only. You should not act upon the information presented herein without seeking the advice of legal counsel.