Intellectual Property Due Diligence

IP due diligence is the investigation, before a transaction closes, of whether the target owns the intellectual property it says it owns, whether the rights are registered and maintained where the business operates, and what licenses, security interests or disputes limit them. It is run from the public registers outward, since the seller's own schedule is a statement of belief, and it ends in the purchase agreement, where each gap becomes a condition, a price term or an indemnity. The test is whether the target can prove title to each core asset, document by document, from the person who created it to the entity selling it.

Whenever the price assumes the target owns something intangible. In an acquisition the review is full: title, registrations and encumbrances for every core asset. In a venture or growth financing the investors' counsel runs a lighter pass focused on founder and contractor assignments, because an unassigned founder invention is the defect most often found at that stage. In a loan secured by IP the lender's question is perfection: a security interest in patents and trademarks is perfected by a UCC-1 filing, while one in a registered copyright has to be recorded at the Copyright Office to hold against a later lender. The review is scaled to the question the deal is asking.

Three things, in order. Title: the chain of assignments from each inventor, author or contractor to the selling entity, checked against the USPTO and Copyright Office records and against the employment and contractor agreements behind them. Scope and status: whether registrations are live, whether maintenance and renewal fees are current, and whether the claims or the classes cover what the business sells. Encumbrances: inbound and outbound licenses read for exclusivity and change-of-control triggers, security interests recorded against the portfolio, and open-source obligations in the code; disputes pending or threatened are listed with them. The report ranks what it finds by what the transaction itself will do to the right.

Because a company can only sell or pledge what it owns. A missing inventor assignment, an unrecorded transfer, or work created by a contractor without a written IP-assignment clause can mean the seller does not hold the rights the deal assumes. Finding those gaps before closing lets the parties fix them, adjust price, or allocate the risk through representations and indemnities while the terms are still open.

Findings shape valuation, terms, and risk allocation. A clean portfolio supports the price; a defect can justify a price adjustment, a closing condition to cure it, a specific indemnity, escrow, or a deal-specific representation and warranty. We translate what the review uncovers into concrete positions for the purchase or investment agreement, so the diligence feeds directly into the deal documents.

We conduct the legal IP diligence covering ownership, registrations, licenses, encumbrances, and freedom-to-operate analysis, and we coordinate with registered patent counsel and technical consultants where prosecution history, claim-scope opinions, or dedicated patent searching is required. That keeps the legal and technical strands aligned while the right qualified professional handles each, which matters most on patent-heavy and deep-technology transactions.