What an Intellectual Property Audit Checks
An intellectual property audit and assessment means the systematic verification of the legal bases on which a given right rests: who holds the right, in what documentary form the right is transferred, how ownership is proven and for how long it lasts. Georgian legislation does not provide a separate, special statute on an "intellectual property audit" — the legal framework of the audit begins with the norms of the Georgian Law on Copyright and Neighbouring Rights. Below are the four blocks that constitute the foundation of every copyright audit.
This guide is intended both for individuals taking inventory of their creative assets and for companies verifying the chain of rights before a transaction.
Bases of Transfer and Inheritance
Under Article 35 of the Law, copyright is transferred by operation of law, by testament in the order of inheritance, or by contract. By operation of law, the exclusive rights of use of the work pass to the heirs within the term of copyright, unless the testament provides otherwise. The rights of authorship, of the name and of the inviolability of the work are not transferred by inheritance — the heirs have only the capacity to protect these personal rights, and that capacity is not limited in time. For an audit this defines a boundary: pecuniary and personal rights follow different regimes. The author may also designate a person to protect these rights, who performs the duty until the author's death; and where heirs do not exist or exercise protection inadequately, protection is carried out by the National Intellectual Property Centre Sakpatenti.
The Form of the Contract
Article 42 of the Law strictly defines the form: a contract on the transfer of copyrights, a contract on the creation of a work and a licence contract must be concluded in writing. There is a single exception: a licence contract on the use of a work in periodical print publications may be concluded orally. In audit practice this means that every non-written transfer, apart from a licence contract connected with a periodical publication, is recorded as a formal defect and must be cured before the transaction is closed.