What Diligence Helps Identify a Startup's Intellectual Property Ownership Risks?

Intellectual property diligence should establish who created the startup's core assets, who owns them, and whether the company has the rights needed to operate. A patent or trademark listed in a pitch deck does not settle those questions. I begin with an asset inventory and trace each important item to its creators and agreements.

Build an Asset and Rights Inventory

Ask for a schedule of patents, applications, trademarks, copyrights, software, trade secrets, and other assets the company relies on. For each item, record the claimed owner, registration or application status, relevant jurisdiction, any license, and the product or business function that depends on it. Compare the schedule with the product, technical materials, and revenue claims. If a core feature relies on an asset missing from the schedule, ask management to explain the gap.

Request filing receipts, registrations, office actions, maintenance records, and correspondence about ownership or disputes. Check public patent and trademark records for the listed owner and status. A public record is a starting point; it does not by itself establish that the company owns all related work or has freedom to use it.

Trace Each Asset to Its Creators

Request signed assignment agreements and relevant employment or consulting agreements for founders, employees, contractors, university collaborators, and other contributors. Match contributor names to code repositories, design records, invention disclosures, and development history. Confirm that the company has written transfers for work it uses, and ask counsel whether the agreements cover the relevant work and rights.

Review the company's history for prior employment, research institutions, joint development, grants, corporate partnerships, or earlier ventures that may affect ownership or use. Ask: "Who created each core part of the product?" "Was any work done while a contributor was employed or funded elsewhere?" "Are there signed assignments from every contributor?" "Can any agreement be terminated or restricted?" A founder's confidence does not resolve a competing claim from a former employer or collaborator.

Review Licenses and Third-Party Components

For each license, inspect its scope, duration, fees, territory, sublicensing rights, termination conditions, and any limits on changing or selling the product. Identify whether the company can keep serving customers if a license ends or a partner relationship changes. For software, request a component inventory and review open-source terms, vendor agreements, and third-party data licenses. Check whether the company's use, distribution, or modification of those materials fits the applicable terms.

For a physical product or manufacturing process, identify who owns designs, formulas, molds, process documentation, and improvements. Review manufacturing and development contracts for ownership clauses and access to technical files. If a key supplier holds essential know-how, ask what happens if the relationship ends.

Assess Protection and Competing Claims

Have a qualified intellectual property attorney or technical specialist review filings and search for similar rights relevant to the product. Ask whether the company's registrations or applications cover what it actually sells, whether deadlines or office actions remain open, and whether objections or disputes could limit use. Consider asset ownership separately from the risk that its use could infringe someone else's rights.

Request a list of demand letters, opposition proceedings, court matters, and threatened claims, with relevant correspondence. If ownership is incomplete or disputed, ask counsel what corrective assignments, licenses, or contractual protections are appropriate before funding. Record what the company cannot do if a particular right is unavailable, then assess whether the investment case still holds. Related diligence on product use and customer claims is covered in startup traction and product verification.

Checklist

• Obtain an asset schedule tied to products and revenue.
• Check public filing records and request supporting documents.
• Trace contributors to signed assignments and work agreements.
• Review prior-employer arrangements and research affiliations. Check grants and corporate partnerships for ownership terms.
• Inspect licenses and open-source components. Confirm rights to use relevant data and review vendor terms.
• Ask an independent specialist to assess ownership and protection. Review any competing claims separately.

Read next: What should an investor inspect before buying a stake in a private company? and Which diligence work should be handled by independent specialists?

We did all the standard due diligence, management, compensation, intellectual property, markets, technology, competition, strategy, finances, co-investors, suppliers, legal, taxes, exit, etc.

Sources: Family Office Club investor due diligence framework, The Single Family Office. Informational only, not financial, legal or tax advice.