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Corporate law IP Due Diligence (Audit) for Business

Daniel Vinnik

Lawyer

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vinnik@prikhodko.com.ua

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Expert in international corporate, IT, and crypto law. Has extensive experience in business setup and support in the USA, EU, LATAM, and the Middle East. Specializes in corporate structuring, compliance, KYC/AML, IP, GDPR, as well as regulation of crypto and fintech projects.

IP Due Diligence (Audit) for Business

IP due diligence (or IP audit) is a check of whether a company really owns the intellectual property it earns and whether it can safely use it tomorrow morning. Because in the legal world, “we did it” does not mean “we can legally sell it”.

In short: IP DD answers three questions:

what exactly is an IP asset;
who owns it;
what are the risks (and how to eliminate or accept them).

When is IP Due Diligence needed the most?

The most common triggers:

M&A / investment / sale of a share: the investor wants to understand that he is buying not only a team and a presentation.
partnership / license / franchise / distribution: the counterparty asks for guarantees of rights and the absence of disputes.
relocation / structure with a holding: IP must be correctly “placed” in the right company and country.
product scaling: entering new markets, marketplaces, advertising – and suddenly a “letter of happiness” appears about infringement of rights.
internal hygiene: when a company has grown faster than its contracts.

What exactly is checked in an IP Audit?

IP DD is not limited to “do we have a trademark or not”. They check everything that creates or protects the value of the product.

Software and content rights (for IT this is #1)

whether the transfer of property rights from employees/contractors is formalized;
whether there are correct IP clauses in employment/gig/contractor agreements;
who owns the source code, design, documentation, UI/UX, content;
whether the rights are not mixed between a group of companies (“code in LLC, domain in FOP, brand in founder”).

It will also be useful: Cost of trademark registration (TM) in Ukraine

Open-source compliance (often “mine” under the agreement)

which OSS libraries are used;
whether the use complies with licenses (MIT/Apache/GPL/AGPL, etc.);
whether there is an obligation to open the code or transfer derivative works.

TM, brand, domains, social networks

TM registrations (classes, territories, owner, validity, encumbrances);
risk of conflict with other people’s trademarks;
domains: who owns them, where they are registered, is there access control;
accounts in marketplaces/social networks: who they are registered for, who is the administrator.

Patents, utility models, industrial designs (if relevant)

are there objects, is there a point in registering them;
are you not violating other people’s rights (minimum level of freedom-to-operate).

Get legal advice

Contracts that “touch” IP

contracts with clients (who owns the result, is there a license, guarantees, indemnity);
contracts with contractors (ownership, subcontracting, confidentiality);
NDA / NCA / non-solicit (so that it doesn’t “leak” out of your head);
platform terms (app stores, marketplaces) — sometimes they “take” more rights than it seems.

Disputes, claims, blocking

existing/potential disputes;
claims from copyright holders or former contractors;
DMCA/complaints/blocking accounts.

Typical “red flags” (which then cost more than an audit)

no signed IP Assignment / acts / correct terms in contracts with developers;
key code was written by “a friend of a friend is a freelancer”, and legally he has the rights;
TM is registered to the founder, not the company;
domain/accounts are issued to an employee/marketer (and he is no longer “on the team”);
GPL/AGPL is used at the heart of the product, and the sale is going on as a “closed SaaS”;
customer contracts contain guarantees “we don’t violate anything” without any verification;
the brand name turns out to be “occupied” in key countries/classes.

How IP Due Diligence works: a 6-step process

Scope and goals. What assets? What jurisdictions? For what (investment, sale, internal cleaning)?
Data room and document checklist. The company collects documents; we immediately see where the “hole” is.
Legal analysis + chain of title reconciliation. Rights should not “appear out of thin air”. They should be transferred/created/registered.
Interview / clarification. Short questions to CTO/PM/HR/marketing. Often this is where the real picture opens.
Risk Matrix + prioritization. Risk = probability × consequences. It is important not to “scare”, but to rank.
Report + Roadmap for eliminating risks. Specific actions: what contracts, what registrations, what changes to templates, what confirmations to collect.

What documents are usually needed (short checklist)?

For software/content

register of developers (staff/contract), copies of contracts;
IP clauses / assignment / acceptance certificates;
policy for working with code/repositories (who has access);
list of third-party components (OSS) or SCA report (if any).

For a brand

TM certificates / applications / correspondence with patent attorneys;
licenses / permits for using the brand (if any);
list of domains, registrars, accesses.

For commercial contracts

template agreements with customers/partners;
key contracts where IP is critical (enterprise, white-label, franchise);
NDA / DPA (if necessary).

For disputes

claims/letters/complaints;
court/arbitration materials (if any).

Table: what do we check and what are the most common risks?

Object of verification	Key question	Evidence/document	Typical risk
Source code / repositories	Who is the copyright holder?	contracts, IP assignment, deeds, access policies	contractor/ex-employee rights
UI/UX, design, content	Are property rights transferred?	contracts with designers/content	“bought the layout” ≠ bought the rights
OSS components	Are licenses compatible with the product model?	library list, policy, SCA	GPL/AGPL risks, disclosure obligation
Trademarks	Who is the owner and where is the protection?	Certificates/applications/classes	TM on an individual or in the wrong classes
Domains/Accounts	Who controls access?	whois, registrar, 2FA, admin	loss of control, blocking
Customer Agreements	Who owns the work product?	MSA/SOW, license terms	exclusive/excessive warranties
Disputes/claims	Are there any active conflicts?	letters/complaints/courts	“surprise” during the investment

What does the client get at the exit?

IP DD (Audit) → Report → Risk Matrix → Action Plan (Roadmap) → Fix Pack

Examples of a “fix pack”:

updated contracts with contractors/employees with correct IP assignment;
decisions on re-registration of domains/accounts and access policy;
plan for registration/expansion of TM (classes/countries);
OSS policy and process of approval of libraries;
corrections of guarantees/indemnity in contracts with customers.

Practical part: how to prepare for an audit in 24–48 hours?

make a list of people who created the product in the last 2–3 years;
collect their contracts and find out if there are property rights there;
prepare a list of domains and accesses (registrar, mail, 2FA);
form a list of TMs/applications/brands;
extract 5–10 key contracts with customers;
If there is OSS, at least prepare a list of critical libraries.

Find out the cost of legal support

How can we help?

The Prikhodko & Partners team supports IP due diligence for both internal audits and M&A/investment deals:

we form a clear scope and checklist for your product (software-first);
we create a chain of title by code/content/brand;
we prepare a Risk Matrix with priorities and specific actions;
we provide a package of documents for correction (contracts, IP assignment, NDA, policies);
if necessary, support for TM registrations and IP structuring between group companies.

IP due diligence does not “guarantee that there will be no problems”. It guarantees something else: problems become visible before they become expensive. To get a consultation and find out the cost of IP Due Diligence (Audit) for your business – fill out the form below.

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1 question

Are you interested in a legal analysis of an agreement on the transfer of rights to an IP object?

Yes

2 question

Do you need to develop a quality NDA based on your business?

Yes

3 question

Do you need legal advice on IP Due Diligence (Audit)?

Yes

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Increase in the authorized capital of the enterprise Increase of authorized capital Inspection of the website of the financial company for violations of NBU regulations Introduction of corporate rights to the authorized capital Introduction of corporate rights to the authorized capital of the company IP Due Diligence (Audit) for Business Legal audit of the company Legal audit of the company’s constituent documents Legal Opinion Letter Legal support for the purchase/sale of financial institutions in Ukraine Legal support for the sale of LLC with VAT and without VAT Legal support of mergers and acquisitions of companies in Ukraine License (authorization) for the provision of payment services in Ukaraine License for brokerage activity in Ukraine License for processing and disposal of waste License for professional activity on the securities market in Ukraine License for professional activity on the stock market in Ukraine License for sea and river transportation in Ukraine License for the production of solar electricity License for the radio frequency resource of Ukraine License for the supply of gas and electricity in Ukraine License for trade in dual purpose goods LICENSE TO BETTING License to carry out activities in the field of television and radio broadcasting License to import medicinal products in Ukraine License to provide financial services in Ukraine Liquidation by merger Liquidation of a company Liquidation of a joint-stock company Liquidation of a legal entity Liquidation of a public organization Liquidation of a representative office of a foreign company in Ukraine Liquidation of a utility company Liquidation of an Individual Entrepreneur Liquidation of problematic assets in Ukraine Liquidation of the company in Ukraine Liquidation of the company in Ukraine due to the sale of corporate rights Liquidation of the condominium Liquidation of the enterprise Liquidation of the farm LLC Liquidation in Ukraine LLC registration in Ukraine LOAN FOR BUSINESS IN UKRAINE M&A in Ukraine. Legal support of agreements Making changes to information about a legal entity Mediation of corporate disputes Natural gas distribution license OBTAINING A BANKING LICENSE IN UKRAINE Obtaining a financial license in the insurance sector OBTAINING A LICENSE FOR A PAWN SHOP IN UKRAINE Obtaining a license for an educational institution Obtaining a license for collection in Ukraine Obtaining a license for passenger transportation Obtaining a license for the production of oil products in Ukraine Obtaining a license from the NBU to provide financial services Obtaining a license to sell electricity Obtaining a securities trading license Obtaining Diia City residency on a turnkey basis Open a Business in Ukraine Opening a bank account in Ukraine for a foreigner Opening a brokerage account for ukrainians Opening a Business in Ukraine for Foreigners (Turnkey Legal Support) Opening a company by power of attorney Opening an account for a Ukrainian individual entrepreneur abroad Opening an account in a foreign bank Opening corporate accounts in Ukraine for non-residents Participant’s application for withdrawal from the Limited Liability Company (LLC) PAYMENT OF DIVIDENDS FROM A NON-RESIDENT Payment systems technology operator license Pledge of corporate rights PROCEDURE FOR OBTAINING A LICENSE IN THE FIELD OF INSURANCE Purchase of corporate rights by a resident from a non-resident Purchase of corporate rights from an individual Re-registration of a legal entity Reasons for excluding a participant from an LLC Receipt of dividends by a legal entity Receiving certificates confirming the status of a tax resident of Ukraine Receiving dividends by an individual Refund of taxes from Germany Register a company for a non-resident in Ukraine Register a company for non-residents in different countries Registration of a branch of a legal entity Registration of a change in the head of a legal entity Registration of a charitable fund Registration of a company with a construction license (СС1 /СС2 /СС3) in Ukraine Registration of a company with a license for currency exchange activities in Ukraine Registration of a credit institution in Ukraine Registration of a financial company Registration of a financial company in Ukraine Registration of a foreign holding Registration of a JSC (joint stock company) Registration of a leasing company Registration of a legal entity Registration of a pawn shop in Ukraine Registration of a payment infrastructure operator in Ukraine Registration of a political party in Ukraine Registration of a public company Registration of a public organization Registration of a representative office of a foreign company in Ukraine Registration of a UIF (unit investment fund) in Ukraine: how the structure works and what is important to consider Registration of AMC (asset management company) Registration of an Individual Entrepreneur Registration of an insurance company in Ukraine Registration of credit institutions Registration of factoring company Registration of individual entreprenuer (IE) Registration of investments in Ukraine for non-residents Registration of OSBB Registration of the issue of securities in Ukraine Regulatory Status Restoration before the National Securities and Stock Market Commission Removal of the deceased member from the LLC RENT ADDRESS FOR THE COMPANY. VIRTUAL OFFICE IN UKRAINE Reorganization of the enterprise Reporting on CFC – 2025 Reservation of employees via Diia City RESOLUTION OF CORPORATE DISPUTES Return of assets Sale of a financial company licensed to provide loans and bank metals Sale of corporate rights Sale of LLC shares Sale of shares in a limited liability company (LLC) Search for assets in Ukraine STRUCTURING PAYMENTS AND FINANCIAL FLOWS FOR BUSINESS SUBMISSION OF A FULL REPORT ON CIC Submission of CFC reporting Taxation of controlled foreign companies in Ukraine Termination of the GIG-contract THE PROCEDURE AND POSSIBILITIES OF MAKING CHANGES TO THE CHARTER OF A LEGAL ENTITY Transfer of corporate rights to management Unblocking a bank account abroad Unlocking accounts in payment systems Unlocking accounts of a legal entity Withdrawal of LLC dividends