There are two primary reasons for conducting an intellectual property audit. First, it is prudent for a company to periodically determine whether its intellectual property is being properly protected. Intellectual property resides in every department in a firm, and it is common for firms to simply overlook intellectual property that is eligible for protection.
The second reason for a company to conduct an intellectual property audit is to remain prepared to justify its value in the event of a merger or acquisition. Larger companies purchase many small, entrepreneurial firms primarily because the larger company wants the small firm’s intellectual property. When a larger company approaches, the smaller firm should be ready and able to justify its valuation.