Here is the link to a published article that I wrote about IP due diligence:
* Start-Up Entity Intellectual
Property Due Diligence Checklist - NCMA CM Magazine - published in the September 2013 issue of CM Magazine
START-UP ENTITY INTELLECTUAL PROPERTY DUE DILIGENCE CHECKLIST
entrepreneurial activities and innovations of start-up entities are the on-going lifeblood of the free enterprise system and
our economy. New and innovative business ideas are craving validation,
new customers, and valuable resources. Many of the fledgling companies that are experiencing rapid growth are on their way
to venture backed funding, or going public, or becoming the technology giants they were designed to be… 
A start-up company is a new business
organization that has recently launched operations and has not yet built up any degree of measurable history or business volume
that allows for comparison over multiple time periods. Businesses that are considered start-ups usually are seen as high-risk
ventures, since they do not have any track record of success, and in fact may still be struggling to build a client base and
begin to generate some type of revenue. Investors often look closely at the nature of the products and services offered by
a start-up company, the expertise of the owners, and the business
plan for the operation before making a decision regarding whether to invest in the business, and how much they are willing
to risk. 
to the entity products and services, business plan, and the expertise of the owners, the intellectual property (IP) of the
start-up entity is vital. Its IP is often the start-up entity’s most valuable asset.
IP is knowledge,
creative ideas, or expressions of the human mind that have commercial value and are protectable under copyright, patent, service
mark, trademark, trade dress, or trade secret laws from imitation, infringement, and dilution. Intellectual property includes
brand names, discoveries, formulas, inventions, knowledge, registered designs, software, and works of artistic, literary,
or musical nature. It is one of the most readily tradable properties in the digital marketplace. 
Why is IP important to start-up entities?
To protect core
idea upon which the start-up is founded
To create and maintain a competitive advantage
protect R & D investment (both time and money)
To generate revenue
To defend the entity
To protect your brand (once product is sold or service is available)
To attract investors
use as collateral to secure financing 
IP due diligence is an audit to assess the
quantity and the quality of intellectual property assets owned by, or licensed to, an entity. It should also include an assessment
of how intellectual property is captured and protected by the entity. IP due diligence is carried out by a prospective purchaser
in relation to the IP assets of the target entity. IP due diligence can also be carried out by an entity on its own IP
assets in preparation for a transaction, such as a business sale or a major licensing deal. 
should be noted that the scope of this article is limited to start-up entity IP due diligence. However, when a start-up entity
goes through a full due diligence review it also covers: business organization structure and good standing status; financial
information; physical assets; real estate; employees and employee benefits; licenses and permits; environmental issues; taxes;
material contracts; products and services; customers; litigation; insurance; professional advisers; articles and publicity
about the entity; and technologies.
In your contracts management activities it is likely
nowadays that you will be asked by your employer to participate on a team to assist in evaluating the IP of your organization’s
start-up entity or of another start-up entity. The “Contracts Management Body of Knowledge” states: “Contracting
professionals should be aware of the various forms of intellectual property, the need for intellectual property that may be
a part of contract requirements, and the limitations on the use of intellectual property imposed by law.” 
In my contracts management career, I have reviewed the IP of many start-up entities.
In order to systematically cover the multitude of unique issues in the review of a typical start-up entity IP portfolio, I
have developed a practical “Start-Up Entity Intellectual Property Due Diligence Checklist”. Set out below is my
due diligence fifty (50) item checklist that I use in reviewing the IP of a start-up entity:
FIFTY (50) ITEM CHECKLIST
1. Can a monetary value be placed on each IP asset of the entity? If so, what are
the values of each IP asset?
2. Are there processes and policies in place to adequately capture
all IP assets created by the entity? If so, what are they?
3. Is there a clean chain of title/ownership without encumbrances
to all entity IP assets?
4. Does any other party infringe any entity IP asset?
5. How does the entity monitor the market for infringing activity of entity IP rights?
6. Are there any unnecessary costs being incurred in maintaining any non-utilized
entity IP assets?
7. Does the entity have “freedom to operate” in
respect to its past, present, or future business activities without infringement of the IP rights of others?
8. If the entity acquired any IP rights from another party did the other party have
full entitlement to them?
9. Does the entity fully understand the scope and coverage of
its IP rights?
10. Does the entity fully understand the protections and obligations of its IP rights?
11. Does the entity fully understand the scope and coverage of its licenses-in with respect to IP rights?
12. Does the entity fully understand the scope and coverage of its licenses-out with respect to IP rights?
13. Does the entity fully understand its licenses-in warranties and indemnifications with respect to IP rights?
14. Does the entity fully understand its licenses-out warranties and indemnifications with respect to IP rights?
15. Does the entity have proper signed written IP assignment agreements with all founders, key contractors,
and employees that transfer all IP rights to the entity? 
16. In general, have the entity contracts containing IP related provisions been professionally
drafted and negotiated on behalf of the entity by a contracts manager or other contracts professional?
17. Do any founders or former employers of the founders have any ownership rights in entity IP?
18. Does the entity understand the rules of inventorship? 
19. Does the entity understand when it is important to obtain a patent and when it
is unfavorable to obtain a patent? 
20. Are the entity business plans, goals, assets, and organizational structure compatible
with the entity’s IP assets?
21. Are the entity products and services adequately protected
by the entity IP?
22. Regarding patents, IP due diligence should address: laboratory notebooks; invention
disclosure documents; prior art; patent searches; freedom to operate opinions; patentability opinions; other patent attorney
opinions; regular and provisional patent applications; office actions; agreements between inventors and the entity; patent
issuances; maintenance fees; infringement claims; and incoming and outgoing patent licenses and patent sales.
23. Regarding trademarks/ service marks, IP due diligence should address: trademark and service mark written
opinions on ability to use trademarks and service marks; trademark and service mark applications; ” intent to
use” filings; registered and common law trademarks and service marks; products and services not covered by trademarks
and service marks; manner in which trademarks and service marks are used, marked, and footnoted; trademark and service mark
manuals and guidelines; infringement claims; and incoming and outgoing trademark and service mark licenses and mark sales.
24. Regarding copyrights, IP due diligence should address: identity of copyrighted
works created; copyright registrations; review of “work for hire” agreements; infringement claims; copyright licenses
and copyright sales; and any encumbrances or security interests on copyrights.
trade secrets, IP due diligence should address: inventory of all trade secret items; who knows the trade secrets; how trade
secrets are kept secret; infringement claims; trade secret licenses and trade secret sales; and trade secret policies and
26. Regarding URLs, domain names, and web sites, IP due diligence should address:
identity of URLs, domain names, and web sites; maintenance of URLs, domain names, and web sites; protection of URLs, domain
names, and web sites; and licenses and sales of URLs, domain names, and web sites.
the entity missed opportunities for patent protection by not meeting deadlines, patent application requirements; or otherwise?
28. Has the entity been engaged in poor trademark/service mark selection by being too descriptive, generic,
29. Have there been “field of use”, assignability, exclusivity, or other
errors in IP licensing?
30. Has there been use of open source software in product development?
31. What is the entity domestic patent strategy?
32. What is the entity foreign patent strategy?
33. What is the entity copyright strategy?
34. What is the entity domestic trademark/service mark strategy?
35. What is the entity foreign trademark/service mark strategy?
is the entity trade secret strategy?
37. What is the entity IP in-licensing strategy?
38. What is the entity IP out-licensing strategy?
39. Provide a list and summary of all entity one-way and multi-party
40. Do any of the entity confidentiality agreements compromise
any entity IP rights?
41. Does the entity have all the rights to databases that handle raw data for entity
42. Do the entity employees have post-termination IP obligations to assist the entity
in various matters like registration of IP or assisting with litigation?
the entity intentionally disclosed/published any of its inventions so that another party could not patent it?
44. Does the entity have any software patents?
45. Does the entity have any business process patents?
46. Does the entity have an incentive program to encourage creation of inventions and patents?
47. Is there a centralization of authority within the entity on who can engage outside IP legal counsel?
48. Provide a summary of all IP related charges and IP expenses since the beginning of the start-up entity.
49. Has the start-up entity entered into any government contracts that have rights
in data, patent, copyright, or other IP provisions? If so, what is the effect of such government contract provisions on entity
50. Has the entity had the on-going assistance of competent seasoned IP legal counsel
on all material IP matters?
completion of the start-up entity IP due diligence review, it is customary to address any outstanding issues with the entity,
both to provide the entity an opportunity to rebut any negative conclusions and to agree upon remedial actions. In summary,
an IP due diligence review focuses upon two distinct topics: freedom to operate and exclusivity. Both are necessary to establish
the intellectual property foundation required to make the start-up entity and its technologies attractive to investors and
This checklist certainly
helps in doing a due diligence review of a start-up entity’s IP. However, this checklist is not exhaustive. Every
entity’s IP status and portfolio has some unique aspects that may not be addressed in this checklist. However,
if you routinely use this checklist as one of several resources when you do a due diligence review of a start-up entity’s
IP, you will be pleasantly surprised with the large number of substantive, material, risk reduction, liability, freedom of
operate, exclusivity, process enhancement, performance improvement, and cost-savings IP related issues that will be
surfaced for proper resolution.
JOHN (“JOHNNY”) E. MILLER, a Texas and Missouri attorney, is a contracts
management consultant who has worked in contracts management for many companies in the last 30 years. He is a Certified Professional
Contracts Manager (CPCM). His web site is: http://www.con-tracts.com/ . He is a member of the Greater San Antonio
Chapter of NCMA. Send comments about this article to firstname.lastname@example.org.
 Contract Management Body of Knowledge (CMBOK), 3rd Edition,
Chapter 3, Section 1.8 “Intellectual Property”