{"id":23011,"date":"2019-08-14T16:13:56","date_gmt":"2019-08-14T10:43:56","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=23011"},"modified":"2023-07-06T22:18:09","modified_gmt":"2023-07-06T16:48:09","slug":"ip-due-diligence-everything-you-need-to-know","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/ip-due-diligence-everything-you-need-to-know\/","title":{"rendered":"IP Due Diligence \u2013 Everything You Need to Know"},"content":{"rendered":"<p>21<sup>st<\/sup> century is the era of innovation; these innovations are playing an important role in the growth of Indian economy. All these innovations are intangible <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Property&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Property refers to the legal designation of ownership over valuable items or assets held by an individual or a business. This ownership grants the holder certain legal rights to use, consume,(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/property\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>property<\/a> or propriety assets which come out from human intellect, which has commercial value.&nbsp; These new ideas, innovations need to be protected and secured under some law. The law protecting these innovations is Intellectual property law. &nbsp;These innovations either belong to an individual or become a key asset of a company. If it belongs to a company, it is important for the company to know the quality and quantity of its IP. The process of the audit to assess the worth of assets owned, licensed by the company is called IP <a href=\"https:\/\/enterslice.com\/due-diligence-services\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Due Diligence (opens in a new tab)\">Due Diligence<\/a>.&nbsp; <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What Is Intellectual Property?<\/h3>\n\n\n\n<p>Intellectual\nproperty law protects one&rsquo;s legal right in respect to the property created by the\nhuman mind- such as inventions, slogan, symbols, any artistic work, design, any\nsoftware, or any technology, etc. There are three ways to protect your\nIntellectual property through the use of &ndash; Patent- Trademark and Copyright. <\/p>\n\n\n\n<p><\/p><div class=\"shadow2\"><strong>A patent applies to specific product\ndesign<\/strong>; <strong>a trademark applies to some specific name,\nphrase, or symbol, last way to protect IP is copyright which applies to a\nwritten document any paper. <\/strong><\/div>\n\n\n\n<p>These laws not only protect the owner of IP rights from third party infringement but also provide many other exclusive rights to the owner. In the emerging nation like India, where an individual is way heading towards the stimulating emergence in technology and scientific activities. Government from all around the globe put efforts to harmonize the IP laws through many kinds of international treaties such as the world trade organization agreement 1994 (WTO) on <a href=\"https:\/\/www.wto.org\/english\/docs_e\/legal_e\/27-trips_01_e.htm\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"top related Intellectual Property Rights (TRIPs) (opens in a new tab)\">top related Intellectual Property Rights (TRIPs)<\/a>. The convention established in the year 1967 by the name of world trade provided the list of subject matter which is protected under Intellectual property rights;<\/p>\n\n\n\n<ul>\n<li>literary,\nartistic work, discoveries in the field of science<\/li>\n\n\n\n<li>Inventions\nrelated to the field of human endeavor <\/li>\n\n\n\n<li>Inventions\nrelated to industrial designs <\/li>\n\n\n\n<li>trademark,\nservice mark, commercial names<\/li>\n\n\n\n<li>protection\nagainst unfair competition <\/li>\n\n\n\n<li>performances\nof stage artists, phonograms and broadcast<\/li>\n<\/ul>\n\n\n\n<p>TRIPs agreement\nis the most effective and complete multilateral agreement until now, which came\ninto effect on 1<sup>st<\/sup> January 1995. According to which following areas\nwill be covered under intellectual property. <\/p>\n\n\n\n<ul>\n<li>Trademarks\nwhich included services marks as well;<\/li>\n\n\n\n<li>Industrial\ndesigns <\/li>\n\n\n\n<li>Copyrights\nand related rights (Which includes producers of the broadcasting organization,\nthe right performance <\/li>\n\n\n\n<li>Geographical\nindications which includes appellation of origin<\/li>\n\n\n\n<li>The\nlayout designs (topographies) of assimilated circuits <\/li>\n\n\n\n<li>The\ninformation which is not closed which includes test data, trade secret<\/li>\n\n\n\n<li>A patent\nwhich includes protection of a new variety of plants<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">How Is Intellectual Property a business\nasset?<\/h3>\n\n\n\n<p>Any company or\nbusiness mainly includes two types of major two assets. One is a physical asset\n&ndash; which includes building, machinery, financial assets, and infrastructure. The\nsecond main asset of the company is intangible assets- which include ideas,\ndesigns, brands, and innovations. In the earlier time, physical assets were\nresponsible for the value of the company, but with time situation have been\nchanged drastically. Revolution in the field of Information technology, for the\ncompany&rsquo;s intangible assets, is becoming more valuable. In simple terms, we can\nsay that now the value of the company is not its factories or large warehouses\nbut now innovative ideas, the software has become the main source of company.\nSMEs are working over their intangible assets and finding out more ways to make\nthe best use of its intangible asset. <\/p>\n\n\n\n<p>Hence, therefore,\nit&rsquo;s important for the company to legally secure its intangible assets. IP\nrights which may be acquired in particular for the given categories of\nintangible assets.<\/p>\n\n\n\n<ul>\n<li>Products and process coming out of innovation (<strong>through patent and utility model<\/strong>)<\/li>\n\n\n\n<li>Computer software and compilation of data(<strong>through copyright and related right protection) <\/strong><\/li>\n\n\n\n<li>Creative designs, this includes textile designs also (<strong>though industrial design right<\/strong>)<\/li>\n\n\n\n<li>Signs, logo for any product distinction (<strong>through trademark<\/strong>)<\/li>\n\n\n\n<li>Microchips (through the protection of layout design or integrated circuits)<\/li>\n\n\n\n<li>Trade secrets (through the protection of undisclosed information of commercial value)<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What is Due Diligence?<\/h3>\n\n\n\n<p>Due diligence is a\nprocess of investigation or audit which should be carried before any investment\nin a business or any merger and acquisition. The main aim of due diligence is\nthe valuation of the company&rsquo;s assets, liabilities, assess the risk within the business.\nThis process plays an important role for the investor or purchaser to make an\nadequate and profitable financial decision.&nbsp;&nbsp;&nbsp;\n<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is IP Due Diligence?<\/h3>\n\n\n\n<p>IP due diligence\nis the investigation to know the worth of the company&rsquo;s intellectual property. It\nis a process of the audit to assess the quality and quantity of intellectual\nproperty of a company or business. The audit also includes an assessment to\nknow how intellectual property is secured and captured by any relevant company\nor business. IP is the essential key assets of any of the company or business. Conversely,\nif a company can&rsquo;t use it&rsquo;s IP due to third party infringement, this may\nsignificantly impact on its ability to operate effectively and therefore on its\nvalue. Intellectual due diligence is often conducted during the merger and\nacquisition or can be carried out by a company on its IP assets in preparation\nfor a transaction for sale of a business, or for acquiring any major license. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What is the goal of conducting IP Due Diligence?<\/h3>\n\n\n\n<ul>\n<li>The\nquality and quantity of the company&rsquo;s IP asset so that the value of a company&rsquo;s\nIP can b carried out by third party and company itself. Which can help a\ncompany to segregate the irrelevant IP assets whose maintenance represents an\nunnecessary cost over the company<\/li>\n\n\n\n<li>The\nprocess can capture all the IP assets the company has created, and at one place\nthese can be used adequately and can be protected at the same time. <\/li>\n\n\n\n<li>The\ncompany can derive the ownership of IP asset to ensure that the company is\nhaving all the necessary rights related to that IP.<\/li>\n\n\n\n<li>The\ncompany even can get the information on whether the third party is infringing\nthe IP rights.<\/li>\n\n\n\n<li>In\nthe condition of merger and acquisition, the buyer can get to know the risks\nand limitations attached and can value the IP. <\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What is the importance of IP Due Diligence?<\/h3>\n\n\n\n<p>The strength of\nan IP due diligence can determine the company&rsquo;s worth. The other reasons to\ndetermine the value of a company&rsquo;s IP are;<\/p>\n\n\n\n<ul>\n<li>Any other company is interested in buying your company<\/li>\n\n\n\n<li>Company is interested in licensing your IP.<\/li>\n\n\n\n<li>Company is interested in an IP trade<\/li>\n\n\n\n<li>Company is&nbsp; preparing for <a href=\"https:\/\/enterslice.com\/learning\/initial-public-offerings-ipos\/\">initial public offering<\/a> or IPO listing on a share <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Market&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;A market is a structured environment, either physical or virtual, where buyers and sellers convene to trade goods and services. This trading hub operates based on the principles of supply and(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/market\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>market<\/a><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">What is the procedure of IP due diligence\n<\/h3>\n\n\n\n<p>For a smooth IP due diligence following step are recommended to be taken;<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" loading=\"lazy\" width=\"644\" height=\"281\" src=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/08\/image-6.png\" alt=\"IP Due Diligence\" class=\"wp-image-23027\" srcset=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/08\/image-6.png 644w, https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/08\/image-6-300x131.png 300w\" sizes=\"(max-width: 644px) 100vw, 644px\"\/><figcaption class=\"wp-element-caption\">Steps for IP Due Diligence<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">Defining Goal <\/h3>\n\n\n\n<p>Without any set\nterm of goal, the investigation cannot be carried properly. With the set of\ngoals, an attorney can perform its task properly. Following are a few questions\nthat can be asked for a better understanding of business and can get a better\nunderstanding of business IP.<\/p>\n\n\n\n<ul>\n<li>Whether\nthe purchase of IP right is the goal of a business transaction?<\/li>\n\n\n\n<li>Who\nwill be using the IP which is being sold?<\/li>\n\n\n\n<li>Whether\nthe IP in question has proper protection right <\/li>\n\n\n\n<li>What\nall transaction has been completed <\/li>\n\n\n\n<li>Define\nthe most relevant objectives of the transaction <\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Investigation <\/h3>\n\n\n\n<p>The investigation\nis the most important and time-consuming part of due &ndash;diligence. Here the\nsearch of facts and information are carried out of a company. It&rsquo;s important to\nknow during the investigation that what all are the products involved in the\nbusiness transaction and other is whether the IP assets are covered under the\nIP protections rights.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Results Analysis<\/h3>\n\n\n\n<p>Results analysis\nis the stage where all the information gathered by the attorney will be\ncombined in a cohesive and understandable format. The result analysis will give\nfurther advice and guidance for the next step. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>IP in now days are the most valuable asset of any company or business. IP Due diligence where it will provide information about the IP of a company, within that the worth of the company&rsquo;s can be carried. Merger and acquisition or the investment are the main conditions when a company carry out then due diligence process so that the third party interested in a company can make most of the profitable decision by investing or purchasing the business. A proper time taking due diligence process and from the good attorney always gives out the best results, and hence the reason of carrying due diligence process can be fulfilled. <\/p>\n\n\n\n<p><strong>Suggested Reads:<\/strong><\/p>\n\n\n\n<ul>\n<li><a rel=\"noreferrer noopener\" aria-label=\"Legal Due Diligence: All you should know about (opens in a new tab)\" href=\"https:\/\/enterslice.com\/learning\/legal-due-diligence\/\" target=\"_blank\">Legal Due Diligence &ndash; Everything You Need to Know<\/a><\/li>\n\n\n\n<li><a href=\"https:\/\/enterslice.com\/learning\/financial-due-diligence\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Financial Due Diligence \/ Accounting Due Diligence - Everything you Need to Know (opens in a new tab)\">Financial Due Diligence \/ <a class=\"glossaryLink\"  aria-describedby=\"tt\"  data-cmtooltip=\"&lt;div class=glossaryItemTitle&gt;Accounting&lt;\/div&gt;&lt;div class=glossaryItemBody&gt;Accounting is the language of business, serving as the backbone of financial management and decision-making. It involves the systematic recording, analysis, and reporting of financial(...)&lt;\/div&gt;\"  href=\"https:\/\/enterslice.com\/learning\/terms\/accounting\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'>Accounting<\/a> Due Diligence &ndash; Everything you Need to Know<\/a><\/li>\n\n\n\n<li><a rel=\"noreferrer noopener\" aria-label=\"Summarizing the Due Diligence Process in India (opens in a new tab)\" href=\"https:\/\/enterslice.com\/learning\/summarizing-the-due-diligence-process-in-india\/\" target=\"_blank\">Summarizing the Due Diligence Process in India<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>21st century is the era of innovation; these innovations are playing an important role in the growth of Indian economy. All these innovations are intangible property or propriety assets which come out from human intellect, which has commercial value.&nbsp; These new ideas, innovations need to be protected and secured under some law. The law protecting [&hellip;]<\/p>\n","protected":false},"author":6,"featured_media":23012,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[2439],"tags":[],"acf":{"service_id":"76"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>IP Due Diligence \u2013 Everything You Need to Know - Enterslice<\/title>\n<meta name=\"description\" content=\"IP due diligence is the process of the audit to assess the quality and quantity of intellectual property of a company or business.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/ip-due-diligence-everything-you-need-to-know\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"IP Due Diligence \u2013 Everything You Need to Know - Enterslice\" \/>\n<meta property=\"og:description\" content=\"IP due diligence is the process of the audit to assess the quality and quantity of intellectual property of a company or business.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/ip-due-diligence-everything-you-need-to-know\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:author\" content=\"omvir\" \/>\n<meta property=\"article:published_time\" content=\"2019-08-14T10:43:56+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-07-06T16:48:09+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/08\/IP-Due-Diligence.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Soniya Khanna","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2023\/06\/MicrosoftTeams-image-6.jpg","authorDescription":"Soniya Khanna is a legal professional, known for her expertise in Business Law, Information Technology Law and Contract Management. With over 7 years of experience in the legal field she regularly contributes to legal publications, shares her insights on emerging legal trends and provide practical advice to readers.","postViews":486,"readingTime":5,"nextPost":{"id":23020,"slug":"simplification-of-the-process-of-incorporation-of-section-8-companies"},"prevPost":{"id":22946,"slug":"ngos-urged-fssai-to-defer-food-safety-and-standards-regulations-2017-allied-to-organic-foods"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2019\/08\/IP-Due-Diligence.jpg","postTerms":"Due Diligence","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/23011"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=23011"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/23011\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/23012"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=23011"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=23011"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=23011"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}