Intellectual Property Due Diligence

When undertaking Intellectual property due diligence, whether for internal or external purposes, it is essential to assess whether any intellectual property rights exist in the business. One should also consider the potential for intellectual property to exists, whether or not they are capable of being protected and if so, in what form.

It is advisable to engage an experienced intellectual property solicitor to assist in identifying intellectual property and issues relating to data protection, confidentiality and the various duties which are likely to pass as a result of the due diligence. Once identified, the costs and timescales involved in safeguarding and protecting those intellectual property rights will need to be evaluated.

The most common intellectual property rights used by businesses are copyrights and trade marks. Design rights and patents may also exist, depending on the type of business and its market position. For a definition of each of these rights- please visit our website:

A list of all the intellectual property rights needs to be drawn up together with timelines which detail their existence. The creator of the intellectual property rights will need to be identified, as will any persons who have provided further participation and/or input to date. The relationship of the business with the creator of those intellectual property rights should also be evaluated.

The due diligence process will need to examine whether any other persons or corporate entities have been allowed to use or otherwise exploit the intellectual property rights, whether under licence or otherwise. An additional consideration is whether the ownership or validity of any of the intellectual property rights has been questioned by a third party or otherwise and whether a claim of infringement has been made by a third party.

Care needs to be taken to ensure the business can assert its claim to the intellectual property rights identified. A business should therefore undertake the following three-step exercise as part of the due diligence process:

(1) Identify the intellectual property rights in existence

(2) Assess which rights can be protected and

(3) Add value to the business on the basis of these intellectual property rights.

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