Due Diligence

Intellectual Property Due Diligence

Learn to verify a business actually owns and can protect the IP it's built on (code, brand, content, designs), because the core asset may legally belong to a contractor, not the company.

  • Intermediate
  • 12 min total
  • 13 chapters

What decision this helps you make: Whether the intangible assets a business is built on are actually the business's to sell: owned, protected, and clean.

What this topic is

IP due diligence verifies that a business actually owns and can protect its intellectual property (code, brand, content, designs, patents, trade secrets) and that it doesn't infringe anyone else's. For software, media, and brand businesses, the IP can be most of what you're buying.

Why it matters

A clean chain of ownership can't be assumed just because the business uses the asset daily. IP created by a contractor or founder without a written assignment may legally belong to the creator, not the company. The nightmare is buying a business and finding the core asset isn't actually owned, or infringes someone else's rights.

Who should learn it

Anyone buying a software, content, brand, or IP-driven business.

What you will understand

  • Understand IP diligence: verifying ownership and protection of intangibles
  • See why "the business uses it" ≠ "the business owns it"
  • Check ownership (assignments), protection, freedom to operate, encumbrances
  • Avoid buying a core asset that isn't actually owned

Prerequisites

Common misconception

"The business built this software (or brand, or content) and uses it every day, so of course it owns it." Not necessarily. If a contractor, freelancer, or even a founder created it without a proper written assignment agreement, the IP may legally belong to the creator, not the company. With intangible assets, a clean chain of ownership can't be assumed from daily use. IP diligence confirms that what you think you're buying is actually the business's to sell.