An IP audit is a structured review of the intellectual property a business owns and relies on: what the rights are, who legally owns them, whether they are registered and in force, and which licences, risks and gaps attach to them. It produces an inventory of rights with the evidence of title against each, a list of defects to fix, and recommendations on how the IP should support the business plan. It is how an owner establishes what the company owns before a buyer, investor or lender tests it for them.
This guide is about intellectual property, not an audit of IP addresses on a network.
Last reviewed 12 October 2026. Written for UK companies. General information, not legal or tax advice.
An IP audit starts from the business, not from the registers. It asks four questions of every asset: what is it, does the company own it, is it protected and in force, and is it doing a job in the business plan. Registered rights such as patents and trade marks are the easy part. In most SMEs the larger share of the intellectual property is unregistered: copyright in software and content, know-how, confidential information, data and the goodwill in a brand.
Three neighbouring exercises are often confused with an audit. They answer different questions and are done by different people.
| Review | The question it answers | Typical output | Usually done by |
|---|---|---|---|
| IP audit | What IP do we own and use, is title clean, and what should we do with it? | Inventory, evidence of title, a ranked list of defects, recommendations | IP attorney or solicitor, sometimes with an IP consultant |
| Register search | What rights are recorded in a given name? | Search results | IP attorney, or the business using the UKIPO's online services |
| Freedom-to-operate opinion | Could a specific product infringe someone else's patents in a specific market? | A legal opinion on named products and territories | Patent attorney |
| IP due diligence | What is the buyer or lender acquiring or lending against, and what are the risks? | A report to the buyer or lender | The buyer's or lender's advisers |
| IP valuation | What are the rights worth? | A value or range on a stated basis and method | Valuer |
An IP audit is the owner's own review, done before anyone else asks. IP due diligence covers the same ground from the other side of a deal, and a valuation puts a number on assets the audit has confirmed the company owns.
Once you know what the company owns, our IP valuation hub explains how each kind of IP is valued and when.
The UK Intellectual Property Office (UKIPO) part-funds IP audits for smaller businesses, and the scheme is running in October 2026. GOV.UK lists it under IP Advance, the UKIPO's support scheme for innovative SMEs, in an entry first published on 8 October 2026: IP Audit provides £2,250 including VAT towards the cost of an IP audit, and the business contributes £750. In its Innovation and Growth Report for 2025 to 2026, the UKIPO says it supported more than 340 SMEs through the scheme that year.
| Point | What the published terms say |
|---|---|
| Funding | Up to £2,250 including VAT towards the cost of the audit |
| Business contribution | £750 (Innovate UK Business Growth states it as including VAT) |
| Who delivers it | Not the UKIPO directly. Applications go through its regional partners; in England that is Innovate UK Business Growth |
| Who is eligible | Trading businesses with fewer than 250 staff where IP is, or will be, an essential part of their growth plans. The GOV.UK entry is tagged for every UK nation and region |
| Condition in England | The business must be receiving intensive growth support from an Innovate UK Business Growth innovation and growth specialist; the audit is part of that service |
| Who carries out the audit | A qualified IP professional |
| What it produces | Advice that identifies IP-related opportunities and risks, with recommendations on exploiting and managing the IP and, where appropriate, on further investigation |
In England the route in is an Innovate UK Business Growth adviser rather than an open application form. A business already working with one asks them about IP Audit; a business that is not starts by contacting Innovate UK Business Growth. The GOV.UK entry names only the partner for England, so a business in Scotland, Wales or Northern Ireland should ask the UKIPO which regional partner covers it.
Scheme terms change. The figures above come from the GOV.UK entry "IP Advance Grant Funding" (first published 8 October 2026) and Innovate UK Business Growth's "Exploit innovation" page, both read on 12 October 2026. Confirm the current terms with the delivery partner before you plan around them.
A thorough IP audit works through nine areas. Each is set out below, and the checklist in the next section condenses them into one table.
The inventory lists every right the business owns or uses, where it is used and what evidence exists for it. Registered rights come from the registers; unregistered rights come from interviews with founders, technical leads and marketing, and from the contracts and repositories where the work actually sits.
| Right | Registered? | Where the evidence sits | Duration and renewal (UK) |
|---|---|---|---|
| Patents | Yes | UKIPO, the European Patent Office and other national offices | Renewed every year from the fourth anniversary of filing, for up to 20 years |
| Trade marks | Yes | UKIPO; EUIPO for EU marks | Renewed every 10 years |
| Registered designs | Yes | UKIPO | Renewed every 5 years, for up to 25 years |
| Copyright in software, content and drawings | No, it arises automatically | Contracts, assignments, repository history | No renewal |
| Unregistered design right | No | Design records and dates of creation | No renewal |
| Trade secrets and know-how | No | Confidentiality policies, NDAs, access controls | Lasts while it stays secret |
| Database right and data | No | Records of how the data was collected and on what lawful basis | No renewal |
| Goodwill in an unregistered brand | No; protected by the law of passing off | Evidence of trading reputation | No renewal |
| Domain names | With a registrar, not an IP office | Registrar account and registrant record | Renewed for each registration term |
Most of an audit's time goes not on what exists but on who owns it. The chain of title has to run from the person who created each asset to the company, and the rules differ by who that person was.
An employee's invention belongs to the employer in two cases: it was made in the course of the employee's normal or specifically assigned duties, in circumstances where an invention might reasonably be expected to result from them; or it was made in the course of duties that gave the employee a special obligation to further the employer's interests, as can apply to a director or senior manager (Patents Act 1977, s.39(1)). Otherwise it belongs to the employee. Copyright in a work made by an employee in the course of employment belongs to the employer, subject to any agreement to the contrary (Copyright, Designs and Patents Act 1988, s.11(2)). Check that the person was an employee at the time and that the work fell within their duties.
There is no UK equivalent of the US "work made for hire" rule for contractors. Copyright in code, designs or content that a freelancer or agency produces stays with them unless they assign it, and an assignment of copyright must be in writing signed by or on behalf of the assignor (CDPA 1988, s.90(3)).
Anything a founder created before the company existed belongs to the founder until it is assigned to the company. Code, a brand or an invention that predates incorporation needs a written assignment.
Ownership of jointly developed IP follows the collaboration or research agreement. Read the agreement; do not assume.
The most common defect in an SME audit is software or design work delivered by a freelancer or agency against an invoice, with no signed assignment. The freelancer still owns the copyright, and the company may have no more than an implied licence to use it. A written, signed assignment fixes it, and it is far easier to obtain before a buyer or lender is waiting.
For each registered right the audit confirms the registered owner (the company, not a founder or a former group company), the status, the territories, the classes of goods and services, and the next renewal date. It checks that assignments and licences have been recorded at the UKIPO, because late registration limits what can be recovered for infringement in the meantime: a new owner or exclusive licensee that does not register the transaction within six months may be refused its costs for infringement before registration (Patents Act 1977, s.68; Trade Marks Act 1994, s.25(4)). It also confirms that an EU trade mark is not standing in for UK protection: an EU mark has not covered the UK since 1 January 2021. EU marks registered by the end of 2020 were given comparable UK marks automatically on 1 January 2021; EU applications still pending then, and EU marks filed since, were not, and need their own UK filing.
Licensing agreements run both ways. Inbound, the audit lists every licence the business depends on, including third-party software, content and open-source components, and flags change-of-control clauses that let a licensor terminate on a sale, and copyleft obligations in software the business distributes. Outbound, it lists every licence the business has granted: exclusivity, territory, royalty, sublicensing and termination. Royalty terms on an outbound licence later become evidence in a valuation; see our guide to royalty rates from comparable licensing data.
Infringement risk runs in two directions. Outward: is anyone copying the business's products, using its marks or exploiting its designs? Inward: could the business's own products infringe someone else's rights in the markets it sells into? An audit flags the second question where the business is launching a product or entering a new territory. A full freedom-to-operate search and opinion is a separate, product-specific piece of work for a patent attorney.
Under the Trade Secrets (Enforcement, etc.) Regulations 2018, information is a trade secret only if it is secret, has commercial value because it is secret, and has been subject to reasonable steps to keep it secret. The third test is the one audits find failing. The audit lists the business's confidential know-how (formulae, processes, pricing models, unpublished source code), who has access to it, and the protection around it: confidentiality clauses in employment and contractor agreements, NDAs with partners, access controls and a leavers' process. Our FAQ on how to value trade secrets covers what follows once they are identified.
For each significant data set (customer records, product usage data, data used to train models) the audit asks two questions. Does the business have the right to use the data as it does, under UK GDPR, its privacy notices and the terms of any third-party data licence? And is the data protected, through database right, confidentiality and security controls? A data set the business cannot lawfully use is a liability rather than one of its data assets.
The registrant of every trading domain should be the company, not a founder, an employee or the web agency that built the site. The audit checks who controls the registrar account, when each domain renews, and that social media handles and app store accounts are held in the company's name.
The last area turns the inventory into decisions. Which rights protect the revenue the business plan depends on? Where is protection missing in the markets the business is entering? Which rights cost renewal fees without protecting anything the business sells, and which could be licensed to others? Our masterclass lesson on building an intangible asset strategy sets out how IP fits the wider plan.
A software company with 40 staff commissions an IP audit before a Series A raise. The audit finds that its core product includes a module written by an agency with no assignment, and that its main brand, launched in 2022, is protected only by an EU trade mark, which does not cover the UK. The company obtains a signed assignment from the agency and files a UK trade mark application. When the investors' lawyers run their diligence, both points are already answered in the data room. (Illustrative.)
The checklist below is the working version of the nine areas. Use it to gather documents before an auditor starts, or as the index for your own review.
| # | Area | What to collect | Red flag |
|---|---|---|---|
| 1 | Inventory | A schedule of every right, registered and unregistered, with its owner and where it is used | Assets the business relies on that appear on no list |
| 2 | Employee IP | Employment contracts with IP and confidentiality clauses; role descriptions for the people who invent or write code | Inventions or code made outside an employee's duties, with no assignment |
| 3 | Contractor IP | Signed written assignments from every freelancer, agency and consultant | Work delivered against an invoice and nothing else |
| 4 | Founder IP | Assignments to the company of anything created before incorporation | A core patent, mark or codebase still in a founder's name |
| 5 | Registrations | UKIPO, EPO, EUIPO and USPTO records: owner, status, classes, territories | A registered owner that is not the company; no UK mark for the main brand |
| 6 | Renewals | A diary of renewal dates for every registered right | Lapsed patents or marks; renewals paid by an individual |
| 7 | Recordals and charges | UKIPO recordals of assignments and licences; the Companies House charges register | Unrecorded assignments; an old charge over IP never satisfied |
| 8 | Licences in | Every licence the business depends on, including open source | Change-of-control termination rights; copyleft code in distributed software |
| 9 | Licences out | Every licence granted: exclusivity, territory, royalty, term | An exclusive licence that blocks a market the plan depends on |
| 10 | Infringement and freedom to operate | Known disputes, letters before action, any clearance searches | Products launched into new markets with no clearance |
| 11 | Trade secrets | A list of confidential know-how; NDAs; access controls; the leavers' process | No confidentiality terms for contractors; open access to source code |
| 12 | Data | Records of processing, the lawful basis for each data set, third-party data licences | Data used in ways the privacy notice does not cover |
| 13 | Domains and accounts | Registrant records; ownership of registrar, social and app store accounts | The main domain registered to a former employee or the agency |
| 14 | Strategy | A map of which rights protect which revenue lines | Renewal fees on rights that protect nothing the business sells |
An IP audit earns its cost whenever a third party is about to examine the IP, and it should come early enough to fix what it finds. A defect the owner finds can be remedied; a defect the other side finds is usually priced.
| Trigger | Why audit first | Read next |
|---|---|---|
| Selling the business | The buyer's IP due diligence will test title, registrations and licences | Intangible asset due diligence: the buyer's checklist; vendor due diligence |
| Raising equity | Investors ask what IP the company owns and whether it is protected, before and during diligence | Startup IP strategy |
| Borrowing against IP | Lenders need clean, unencumbered title and rights in force. NatWest's High Growth IP Loan, for example, starts at £250,000 and lends up to around half of appraised IP value | IP-backed lending; IP audit for lending |
| Licensing IP in or out | A business can only license what it owns, and the royalty depends on the strength of the right | Royalty rates and comparable licences |
| Preparing for an IPO | The advisers' due diligence covers IP, and the prospectus or admission document describes it | IPO readiness checklist |
For a sale, the audit is the seller's half of the work that the buyer's due diligence later repeats. For a loan, the lender's own checks are set out in our FAQ on preparing a company for an IP-backed loan.
An audit establishes what you own; a valuation sets what it is worth. The order matters. A valuer assumes the company owns the rights being valued and relies on the audit's evidence for it, so valuing a patent the company does not own, or a brand it cannot register, wastes the fee. Once title is confirmed, the method depends on the asset: relief from royalty for brands and licensable technology, excess earnings for the asset that drives the business, and the cost approach where income cannot be separated. Our guides to patent valuation, trade mark valuation and brand valuation cover each.
An audit can also show where tax reliefs may apply. Where it confirms that the company owns patents that earn profits, the Patent Box may let the company apply a 10% rate of Corporation Tax to the qualifying profits (GOV.UK). The conditions are detailed; see our FAQ on the UK Patent Box and take advice from a tax adviser.
Audit first, value second. The audit turns "we think we own it" into documented title, which is what every valuation, sale, loan and licence relies on.
Agree the purpose (a sale, a raise, a loan, a licence or a strategy review), the entities in the group and the territories that matter. The purpose sets the depth.
The auditor sends a questionnaire and a document list: contracts of employment, contractor agreements, assignments, licences, register extracts and any past disputes.
Founders, technical leads and marketing explain what the business has built, who built it and where it sits. Most unregistered rights surface here.
Searches of the UKIPO and other offices for registered rights, and of the Companies House charges register for security over IP.
An inventory of rights, the evidence of title against each, defects ranked by risk, and recommendations on protection and use.
Sign the missing assignments, record transactions, pay or drop renewals, file new registrations and tighten confidentiality terms. Then keep the inventory current, so the next audit starts from a maintained register rather than from scratch.
Gathering the documents usually takes longer than the review itself. A business that already keeps an up-to-date register of its intangible assets, with the evidence held against each one, shortens every step from the second onwards.
An audit report is a snapshot. Opagio Intangibles keeps the inventory current: it records each identified intangible asset, with its evidence, in the Opagio Value Drivers Register™, classified across Opagio 12, so the register an audit produces is maintained between audits and is ready when a buyer, investor or lender asks for it.
Opagio does not carry out legal or statutory IP audits. It does not give opinions on title or freedom to operate, file registrations, or deliver the UKIPO-funded IP Audit scheme; those stay with IP attorneys, solicitors and the scheme's delivery partners. Opagio's own Intangible Asset Audit identifies and values intangible assets and is not a substitute for that legal work.
The Value Drivers Register gives your advisers, buyers and lenders one evidenced list of the intangible assets your business owns. See how owners preparing to sell use it at Opagio for exit-ready businesses, or start with the free Quick Assessment to see where your intangible assets stand today. Opagio is also running a waitlist for its Intangible Asset Audit, which identifies your intangible assets across Opagio 12 and values each one.
An IP audit is a structured review of the intellectual property a business owns and uses. It records each right, confirms the company owns it and that it is protected and in force, identifies licences and risks, and recommends what to fix and how the IP should support the business plan.
Yes. The UKIPO's IP Audit scheme, listed under its IP Advance programme, provides £2,250 including VAT towards an IP audit, and the business contributes £750. It is for trading businesses with fewer than 250 staff where IP is essential to their growth plans. In England it is delivered through Innovate UK Business Growth to businesses receiving its intensive growth support. Terms as published on 12 October 2026; check them with the delivery partner.
Usually an IP attorney or a solicitor specialising in intellectual property, sometimes working with an IP consultant. Under the UKIPO-funded scheme the audit is carried out by a qualified IP professional arranged through the delivery partner.
It depends on the number of rights, entities and territories in scope, and on how quickly the business can produce its contracts and assignments. Gathering the documents is usually the slowest part, which is why keeping a current register of the business's intangible assets makes each audit faster.
They cover the same ground from different sides. An IP audit is commissioned by the owner to understand and fix its own position. IP due diligence is carried out for a buyer or lender to assess what it is acquiring or lending against. An audit done well ahead of a deal means the other side's diligence finds little that is new.
| Read next | Why |
|---|---|
| Intangible asset due diligence: the buyer's checklist | What a buyer's IP and intangibles workstream will request |
| Vendor due diligence | The seller's diligence, with the intangibles section an audit feeds |
| IP-backed lending | How lenders advance against IP once title is clean |
| Patent valuation | Putting a value on patents the audit confirms you own |
| FAQ: How do I prepare my company for an IP-backed loan? | The title, valuation and cash-flow evidence lenders ask for |
| Glossary: intellectual property audit, IP audit for lending, chain of title, Value Drivers Register | Definitions of the terms used above |
David Stroll is Co-Founder and Chief Scientist at Opagio, where he leads research on intangible asset measurement, accounting standards and the productivity of intangible investment. Meet the team.
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