In the realm of start-ups and investments, investors are now placing an increasingly high value on the critical role IP plays in the growth trajectory of start-ups. As a result, many are now asking IP professionals to provide them with independent verification that the start-ups they are interested in genuinely understand IP and, more importantly, how to use it strategically to underpin their growth and future success.
For pre-seed start-ups, a good grasp of the IP landscape and an outline IP strategy aligned with their business plan are positive indicators.
By the seed stage, initial IP protection should be in place, with a formal review of key elements of their Freedom to Operate (FTO) position.
Once a start-up is at the Series A stage or beyond, robust IP protection should be in place, and the start-up should continually be reviewing and updating their IP strategy to ensure they remain investor-ready.
WHAT IS IP DUE DILIGENCE?
IP due diligence is a comprehensive evaluation of a start-up's IP assets and rights. It is aimed at uncovering the true value and potential risks associated with the start-up's IP portfolio. The process extends beyond merely confirming the existence of IP rights; it is an in-depth approach encompassing the entire company - its ideas, products, people and business plans.
Therefore, IP due diligence should be wide-ranging, all-inclusive and conducted with a commercial focus in order to aid investors in gauging the potential for success and the potential return on investment.
WHO SHOULD CONDUCT IP DUE DILIGENCE AND WHEN?
Ideally, IP due diligence should be performed by experienced IP attorneys. This process should start as early as possible in the investment process to identify and address any issues.
THE IP DUE DILIGENCE PROCESS: A SIX-STEP GUIDE
Navigating the world of IP due diligence can seem like a daunting task. However, by breaking it down into six key steps, we can systematically evaluate and analyse the start up's IP position.