Now is the time of year when most companies are evaluating the successes and failures from the current year in anticipation for the coming new year. Companies are finalizing strategic plans. Budgets are under review. Resources are being analyzed and prioritized.

Unfortunately, the one thing that many companies fail to put into the planning mix is an assessment of intellectual property assets. Companies that are proactive with intellectual property management can help to ensure that 2007 will be even more successful than 2006. There are five key resolutions that a company can make now to ensure that it effectively manages and enhances its intellectual property asset portfolio in 2007.

Resolution No. 1: Conduct An Intellectual Property Audit

When most people think of an audit, they think of a financial review of books and records. It is commonly understood that an annual financial review is necessary not only for tax and compliance reasons, but also to ensure that a company is appropriately spending and budgeting its funds. An audit is important to understand whether and to what extent liabilities may exceeds the assets.

The same standard of review and analysis that applies to financial assets should also be applied to intellectual property assets. As with financial assets, it is critical for any technology company to identify its intellectual property, understand its strategy in protecting such assets and put a plan of action in place to make certain that all assets are properly exploited to their full potential. At the same time it is also critical to understand and assess any third party agreement compliance obligations and whether the company is making proper use of third party intellectual property assets.

Surprisingly enough, many technology companies fail to include intellectual property in an annual review of assets. While depreciation and expensing of certain intellectual property may be included in the financial review, a true audit of intellectual property requires a much more detailed review.

An audit requires a review of all company agreements, procedures and policies. It also requires a careful review of the status of all company intellectual property, including technology under development, disclosures of inventions, patents, patent applications, copyrights, trademarks, service marks and trade secrets. Agreements with third parties, employees and consultants should be reviewed for compliance on both sides. It is not at all uncommon for a company to have a right to certain license fees or technology that goes unasserted simply because no one has taken the time to analysis the company’s rights under agreements that are already in place.

A full intellectual property audit requires the participation of legal counsel, corporate management and technical staff. While an audit can be time consuming, the ultimate value in this activity is significant. An audit can uncover potential problems with the intellectual property strategy and can also create significant additional value for the company by helping a company to identify assets that are not fully utilized or exploited.

Resolution No. 2: Take A Close Look At The Competition

Far too often, technology companies are focused solely on the development efforts within their own companies. Unfortunately, a failure to analyze third party activities may result in wasted efforts in a field crowded with patents covering the same technology. There is also a risk that competitors are further along in product development and will have an early entry advantage. A regular and systematic analysis of third party activities will help to identify potentially problematic patents and allow the company the time to either attempt to secure license rights or design around the problematic claims. Such an analysis will also help to assess critical timing of development activities in view of third party competition. A company that is aggressive in its review and analysis of third party activities faces a much better chance of being able to avoid potential intellectual property conflicts.

Resolution No. 3: Schedule Regular I.P. Assessment Meetings

Just what every employee wants for the new year . . . more meetings. While company meetings are often as enjoyable as a visit to the dentist, effectively focused intellectual property assessment meetings can enhance the value of a company. Take, for example, the ideas and concepts that are retained in the head of the employees. A plan of action on the part of the company that would require employees to sit down together on a periodic basis to go over ideas, concepts and thoughts, is likely to encourage inventive activity on the part of all employees, and capture the ideas of employees before those idea walk out the door or are otherwise lost in favor of newer ideas and concepts. These meetings can also be used to share knowledge about third party endeavors and research activities of third parties. By requiring employees to actively focus their discussions on the development, creation and protection of ideas and inventions, there is a much greater likelihood that the company will move forward with new innovative developments.

Resolution No. 4: Review All Policies and Procedures

Many times when intellectual property assets are lost, it is not a result of malice on the part of the employees (or former employees), but rather a result of a lack of understanding regarding the expectations related to intellectual property assets. It is not uncommon for employees to be unaware of the fact that removal of such things as a customer list, corporate software or other company information is not appropriate when departing from the company.

Keep in mind that companies will often have inventions that reside in the minds of its employees. A policy that requires a company to explain such policies to its employees will make it much less likely that an employee will unintentionally violate those policies. Likewise, if there is no policy requiring disclosure of such assets, it is much more likely that those assets will leave with the employees.

In addition, companies should periodically review and analyze all of its critical policies related to the protection of intellectual property assets, such as employee and consulting agreements, corporate disclosure policies and computer and email policies. These policies should be clear and should be communicated to all employees. Finally, the company should also analyze the long term strategies for protecting assets and for determining what assets a company has in its portfolio.

Resolution No. 5: Proactively Plan for 2007

A failure to protect and enforce intellectual property rights and intellectual property assets will only result in a loss or decrease of value of such assets. These assets can be critical to the value of a technology-based company. Accordingly, companies must be proactive when it comes to analyzing and protecting those assets. A strategic plan of action with respect to management of intellectual property assets is a key resource. This strategic plan should cover all aspects of the management of corporate intellectual property and should include all policies and procedures of the company. This plan should be approved by management and understood by all employees.

Final Resolution

Intellectual property is an intangible asset. It cannot be locked up in a safe or put into storage. Accordingly, it is critical that a company be proactive in identifying, protecting and maintaining its intellectual property assets. It should be the goal of all technology companies to enhance and improve their intellectual property management as we move into this new year.

Daniels Daniels & Verdonik, P.A. has been serving the legal needs of entrepreneurial and high technology clients for more than 20 years. Caroline Horton Rockafellow concentrates her practice in the representation or entrepreneurial and technology-based business, focusing on corporate, technology and licensing matters. Questions or comments can be sent to crockafellow@d2vlaw.com.