Harper James is a UK full-service commercial law firm advising businesses on intellectual property and the laws of England and Wales. Intellectual property due diligence is the process of identifying, verifying and assessing a business’s intellectual property before an investment, acquisition, funding round or major commercial transaction.
The review normally covers registered rights such as trade marks, patents and registered designs, together with copyright, database rights, confidential information, domain names and unregistered know-how. It examines whether registrations are in the correct name, whether renewal obligations are being met, and whether the business owns the rights it relies on. A search of relevant registers and company records provides evidence of ownership and any security interests, licences or challenges.
Ownership is often the central issue. The business should review employment contracts, contractor agreements, consultancy terms and development agreements to confirm that intellectual property created for the business was assigned properly. Documents should also be checked for rights received from third parties, restrictions on use and obligations to credit, share revenue or obtain consent. Gaps in the chain of title are recorded for correction before the transaction proceeds.
Due diligence also examines how intellectual property is used. Relevant agreements include software licences, reseller and distribution arrangements, research collaborations, manufacturing contracts, SaaS agreements and customer terms. The review identifies licence limits, territorial restrictions, termination rights, exclusivity provisions and obligations that transfer to a buyer or investor. Open-source software requires particular attention to the applicable licence terms and any requirements concerning disclosure or distribution of source code.
The process should include known or threatened infringement claims, trade mark oppositions, settlement agreements and correspondence about alleged misuse. It should also assess whether the business’s branding, products and software expose it to third-party claims. Findings are usually summarised in a risk schedule, with each issue assigned an owner, recommended action and timetable. Remedial steps can include obtaining assignments, updating registrations, replacing unsuitable agreements, recording licences or securing consents. These findings may then affect the transaction documents, including warranties, indemnities, conditions to completion and the disclosure letter.