A Practical Guide to IP Due Diligence, Assignment & Licensing Advisory
Intellectual property is frequently the single most valuable asset on a growth company's balance sheet — and the most poorly documented. A trademark registered in a founder's personal name instead of the company's. A patent co-invented by a contractor with no assignment on file.
Understanding the Service
IP due diligence is the structured verification of who actually owns, controls, and can enforce a business's intellectual property — trademarks, patents, designs, copyrights, trade secrets, and domain names — before a transaction (funding round, M&A, licensing deal, or joint venture) is signed. It goes beyond confirming that a trademark or patent application exists; it verifies the chain of title from creator to current claimed owner, checks whether every assignment, employment IP clause, and contractor agreement is properly executed and stamped, confirms there are no competing claims, liens, or unresolved oppositions, and assesses whether the IP is actually being used in a manner consistent with its registered scope. In India, IP is treated as property under the Transfer of Property Act 1882 principles as adapted by the specific IP statutes — the Trade Marks Act 1999, the Patents Act 1970, the Designs Act 2000, and the Copyright Act 1957 — each of which prescribes its own assignment formalities, and gaps between them are where diligence findings typically surface.
For the full scope, current process and what PNPC includes, see the dedicated IP Due Diligence, Assignment & Licensing Advisory service page.
When You'd Need This
- You are raising a funding round and investors will conduct IP diligence as part of the term sheet-to-closing process
- Your company is being acquired, or is acquiring another business, and IP forms a material part of the target's value
- Founders, employees, or contractors created IP (code, designs, patents, trademarks) in their personal names or through a personal entity that should belong to the company
- You are entering a licensing arrangement — as licensor or licensee — for a trademark, patented technology, software, franchise format, or content
When It Isn't the Right Fit
- Your business has no registered or registrable IP and no near-term funding, M&A, or licensing transaction on the horizon — routine trademark filing (a separate, simpler engagement) may be sufficient for now
- All your IP was created by founders personally, is already correctly assigned to the company, and no third party contractor or employee has contributed protectable IP
- You need only a first-time trademark or patent filing with no ownership-transfer, licensing, or diligence component — that is a standalone registration engagement, not a due-diligence engagement
Quick Answers
What exactly does 'IP due diligence' cover, and who typically asks for it?
IP due diligence verifies who owns, controls, and can enforce a business's intellectual property — trademarks, patents, designs, copyrights, trade secrets, and domain names — and whether that ownership chain is properly documented. It is most commonly requested by investors ahead of a funding round, by an acquirer's legal team ahead of an M&A transaction, or by a licensor before granting an exclusive licence. It goes beyond confirming a registration exists; it traces the chain of title from the original creator through every subsequent transfer.
Our trademark is registered in the founder's personal name, not the company's. Is this a problem?
Yes, and it is one of the most common findings in early-stage IP diligence. If the trademark was filed before incorporation, or the founder registered it personally out of convenience, the company does not legally own the mark it is trading under — even though it may have built substantial goodwill using it. This must be corrected through a formal assignment deed from the founder to the company, executed with adequate stamp duty and recorded with the Trade Marks Registry via Form TM-P. Until this is done, the trademark is a personal asset of the founder, not a company asset — a fact that investors and acquirers specifically check for.
Who owns IP created by a contractor or freelance developer if there is no written agreement?
Under Section 17 of the Copyright Act 1957, the default rule is that the author of a work — the contractor, not the commissioning business — owns the copyright, unless there is a contract stating otherwise or the work falls within a specific statutory exception (such as work made in the course of employment under a contract of service, as opposed to a contract for service with an independent contractor). This means code, designs, written content, or other creative work commissioned from a freelancer or agency without an explicit IP assignment clause may legally still belong to that freelancer or agency, not your business.
Where PNPC Fits In
Speak with a PNPC Chartered Accountant before your next funding round, acquisition, or licensing deal. We will review your IP portfolio, flag ownership and documentation gaps honestly, and give you a clear remediation plan — on your timeline, not a counterparty's.
PNPC Global has advised Chennai, Bangalore and Hyderabad businesses since 1986. Explore the full IPR practice for related services, or go straight to the IP Due Diligence, Assignment & Licensing Advisory page for specifics.
This is a general explainer, not a substitute for checking today's rules with PNPC or the relevant authority — figures and deadlines move, so none are quoted here as fixed.