Legal Due Diligence of IP Assets
Conducting a legal due diligence of an organization’s IP assets

The results of intellectual activity are increasingly becoming the subject of various disputes arising between copyright holders and persons using intellectual property assets without the permission of the copyright holder.
At the same time, IP assets in the modern world can become the most valuable assets of an organization, the correct registration and protection of which may determine the further possibility of their legal use. In order to exclude gaps in the company's work in the field of intellectual property, it is recommended to conduct an audit of intellectual property assets.
Increasingly, a company's reputation depends on compliance with the requirements of legislation, both national and international, in the field of intellectual property protection. Given the increase in cases related to liability for the use of intellectual property results without permits and registration of legal relations, conducting an audit of a company in the field of intellectual property protection can significantly reduce the occurrence of risks associated with the field of IP assets and possible adverse consequences for copyright holders.
To conduct an audit of IP assets, no special permission from the executive authorities is required, but it is important to note that a legal audit of intellectual property assets should be carried out by a specialist who has not only the necessary knowledge in the field of IP, but also practical experience in conducting such audits. This will allow the company that has applied for such an audit to receive a high-quality result in the form of a conclusion on the state of affairs in the field of intellectual property in the organization, as well as to form regulations for further activities on the issue of regulating IP assets. It should be noted that an important role is played not only by the effective protection of one's own intellectual property, but also by the prevention of violations by third parties related to the illegal use of the company's IP assets.
Conducting a due diligence of IP assets
Conducting an audit of a company in various areas of its activity allows business owners to get a real picture of the affairs in the organization in the areas of the audit, whether it is an audit of the financial spectrum of activity or IP assets.
With all this, it is important to note that the result of the audit should become the basis for further changes in the company's work, taking into account the violations and gaps in the work discovered. To conduct a legal audit (due diligence) of IP assets, it is necessary to:
- collect and study documents on the organization’s activities;
- identify intellectual property assets, including registered and unregistered ones;
- study the process of work in the field of intellectual property of the company's employees, determine their rights, responsibilities, and the necessary documents drawn up with employees;
- analyze gaps in work in the field of IP assets.
Significant issues when studying documents in the field of intellectual property are:
- basis for acquiring rights to intellectual property assets;
- scope and validity of rights to IP assets;
- range of rights of the copyright holder to intellectual property assets;
- other aspects that may appear during the audit of IP assets.
Often, in order to conduct a thorough audit in this area, specialists participating in the audit prepare a list of questions to cover intellectual property assets from all sides, in order to identify all aspects of work in this area and exclude undetected intellectual property and not include them in the strategy for further work on IP assets.
In addition, during the legal audit of the IP, it is necessary to study how IP assets are reflected in the company's accounting. It is important to note that for accounting purposes, an intangible asset is an asset that is characterized by the following features:
- does not have a tangible form;
- is intended for use by the organization in the course of ordinary activities in the production and (or) sale of products (goods), in the performance of work or the provision of services, for provision for a fee for temporary use, for management needs or for use in the activities of a non-profit organization aimed at achieving the goals for which it was created;
- s intended for use by the organization for a period of more than 12 months or a normal operating cycle exceeding 12 months;
- is capable of bringing economic benefits (income) to the organization in the future (ensuring the achievement by the non-profit organization of the goals for which it was created), to receive which the organization has the right (in particular, with respect to such an asset, the organization acquired exclusive rights upon its acquisition (creation), rights in accordance with license agreements or other documents confirming the existence of the right to such an asset) and access of other persons to which the organization is capable of limiting;
- can be allocated (identified) from other assets or separated from them.
Also, an essential aspect of interaction in the field of intellectual property is established cooperation with counterparties on this issue, which is also important to identify when conducting a legal audit (due diligence) of IP assets.
Based on the results of the audit, the auditor, as a rule, issues a legal opinion on the state of affairs in the organization related to intellectual property, including an indication of gaps in the work in this area. In the future, a strategy for eliminating deficiencies in work on intellectual property assets, preventing identified violations of legislation in the field of IP assets, and forming local regulations governing the company's activities in the field of IP assets can be developed.
To eliminate possible violations of the company’s work in the field of intellectual property, it is often sufficient to implement a strategy for working in the field of IP assets developed jointly with the specialists conducting the audit. Such an approach in the field of IP allows avoiding the need to protect rights to intellectual property assets from third parties who are not the copyright holders of IP assets.
Servicios legales
- Consulting clients on intellectual property protection
- Analysis of title documents for the acquisition of IP assets
- Conducting a legal audit of intellectual property assets
- Studying all aspects of work in the field of IP assets in order to issue a full-fledged conclusion on the company's work in this area
- Development of a strategy for eliminating violations identified as a result of the audit in the field of IP assets and its implementation in the company’s work