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Investment IP Review

Does IP Review guarantee the success of the investment?

No, business success depends on many factors. However, an IP Review guarantees that the legal foundation of the technology is solid. It ensures you are investing in a company that actually owns its assets and isn't just a shell facing potential lawsuits. It significantly de-risks the technological aspect of the deal.

What if the founders haven't assigned IP to the company?

This is a common issue. If discovered during the review, we draft "Confirmatory Assignment Agreements" transferring all past and future IP from founders to the company. This must be signed and executed as a "Condition Precedent" (CP) before any investment funds are transferred.

How do you check for trademark risks in new markets?

We conduct a clearance search in the target markets (e.g., US, EU) to see if the startup's brand is already taken. If there's a conflict, we advise on rebranding strategies or purchasing the mark before the startup scales, saving millions in potential rebranding costs later.

Is this service only for tech startups?

While critical for tech, it's also vital for creative industries (film, gaming, fashion), biotech, and manufacturing. Any business where value is derived from innovation, brand, or content needs an IP review to validate its asset base for investors.

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Investment IP Review is a specialized legal service focused on protecting investors (Venture Capital funds, Angel investors) when deploying capital into technological and creative startups. When an investor funds an innovative company, they are essentially buying a stake in its intellectual property (IP). If it turns out that the company does not own this property (e.g., the code is stolen or the patent is not registered), the value of the investment can drop to zero. This service represents a more focused version of IP Due Diligence, where the main emphasis is on investment risks, valuation, and the health of the IP portfolio. With the development of the startup ecosystem in Georgia, this service has become critical for foreign and local investors to avoid unforeseen legal problems.

What Does Investment IP Review Cover?

Specialists analyze the startup's or company's IP assets from an investor's perspective. The service includes:

  • Clean Title Verification: Ensuring that all founders and employees have assigned IP rights to the company via written Assignment Agreements.
  • Protection Status Assessment: Checking if the company has protected its core technology (patents, copyright) and brand (trademark).
  • Open Source Risks: Auditing libraries used in software to see if they obligate the company to open-source its proprietary code (e.g., "copyleft" licenses like GPL).
  • Future Strategy Evaluation: Assessing whether the company has a plan for expanding and protecting its IP portfolio in international markets.
  • Confidentiality Measures: verifying mechanisms (NDAs) for protecting trade secrets.
  • IP Valuation: Determining the market value of intellectual assets in relation to the investment amount.

Real-World Scenarios Where You Need This Service

This service is vital in the following scenarios:

  • Seed and Series A Rounds: An investor is putting the first serious money into a startup and wants a guarantee that the IP assets are secure.
  • University Spin-off: A group of scientists created technology at a university. It is necessary to clarify whether the patent belongs to the university or the scientists.
  • Foreign Investment in Georgian IT: A foreign investor requires confirmation of compliance with Georgian legislation.
  • Startup Mergers: Two tech teams are merging, and compatibility of their IP assets needs to be checked.
  • Ex-Founder Problem: One of the founders left the team but did not sign an IP assignment agreement. The investor needs to know this before wiring funds.

Georgian Legal Framework and Regulations

Investment IP Review is based on the Law of Georgia on Entrepreneurs (corporate structure and contributions) and special IP laws. The Patent Law of Georgia and the Law of Georgia on Copyright and Related Rights define how rights arise for works created by employees (Work for Hire). Often, a standard employment contract is not enough for rights to fully transfer to the company, requiring additional regulation under the Civil Code of Georgia. It is also important to analyze Investment Agreements to ensuring IP Representations and Warranties are correctly drafted.

Service Process Step-by-Step

The process usually runs parallel to investment negotiations:

  1. Signing NDA: Executing a Non-Disclosure Agreement so the lawyer can access the startup's internal documents.
  2. Opening the Data Room: The startup uploads all IP documents (code samples, contracts, patents) to a virtual data room.
  3. Detailed Analysis: The lawyer checks each document and cross-references it with public registry data (Sakpatenti).
  4. Interview with Founders: Interviewing the CTO to establish the history of technology creation.
  5. Report Submission: A "Red Flag" report telling the investor whether to invest or what conditions must be fixed before closing the deal.

Why Choose Legal.ge?

Legal.ge is the ideal place for investors to find independent and qualified lawyers for IP reviews. Our platform hosts specialists with experience in international transactions who understand the specifics of venture capital. They will help you make an informed decision and protect your capital from unforeseen legal risks.

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Specialists for this service

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