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IP Due Diligence

How long does an IP Due Diligence take?

The timeline depends on the size of the portfolio and the complexity of the transaction. A basic check of a few trademarks can take 2-3 days. A comprehensive audit for an M&A deal involving software, patents, and international licenses typically takes 2-3 weeks. We provide an estimated timeline after the initial assessment.

Does the audit cover international IP rights?

Yes, if the company operates globally, we verify registrations in international databases (WIPO, USPTO, EUIPO) through our partner network. It is crucial to ensure that the brand is protected not just in Georgia but in all key export markets where the business is active.

What is a "Freedom to Operate" (FTO) analysis?

FTO is a specific part of due diligence that answers the question: "Can we sell this product without infringing someone else's IP?" We analyze active patents and trademarks in the target market to ensure your product launch won't be blocked by a competitor's lawsuit.

Can IP Due Diligence affect the deal price?

Absolutely. If the audit reveals that key IP assets are not properly owned or protected, the buyer can negotiate a lower price or demand that the seller fixes the issues before closing (Conditions Precedent). In severe cases, it can be a deal-breaker.

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IP Due Diligence (Intellectual Property Audit) is a critical legal procedure aimed at the detailed assessment and verification of intangible assets belonging to a company or individual. In the modern business environment, where a significant portion of a company's value is often concentrated in its brand, technology, and know-how, an IP audit is essential for risk management and capitalization. This process is not just about counting certificates; it involves a deep analysis of who truly owns the rights, whether they are valid, if there are any third-party claims, and how well the business is protected from competitors. IP Due Diligence is particularly important before attracting investment, buying or selling a company, or launching a new product on the market. This service helps businesses avoid costly litigation and ensure the security of their investments.

What Does the IP Due Diligence Service Cover?

Qualified lawyers conduct comprehensive research covering the following aspects:

  • Asset Inventory and Identification: Listing and cataloging all IP objects of the company (trademarks, patents, designs, copyrights, domains).
  • Confirmation of Ownership (Chain of Title): Verifying the history of asset creation and transfer to confirm that the current owner holds full and unconditional rights.
  • Validity Check: Determining whether registrations are in force, fees are paid, and if there is any threat of cancellation.
  • Contract Review: Analyzing licensing, franchising, and employment agreements from an IP rights perspective.
  • Dispute and Encumbrance Check: Searching for information on current or potential lawsuits, liens, or other legal restrictions.
  • Freedom to Operate Analysis: Assessing the risk of whether the company's activities infringe upon the rights of third parties.

Real-World Scenarios Where You Need This Service

IP Due Diligence is essential at pivotal moments in the business lifecycle:

  • Business Acquisition: You intend to buy a company whose main value is its brand. The audit must confirm that the trademark belongs to the company and not to the founder personally.
  • Attracting Investment: A venture capital fund requests an IP audit of your startup to ensure the technology is protected and the code is not stolen.
  • Buying a Franchise: You want to bring a famous brand to Georgia. You must check if the franchisor has the right to grant a license for the territory of Georgia.
  • Internal Reorganization: A company wants to organize its assets to increase capitalization before an IPO.
  • New Product Launch: You are launching a new product and want to ensure its name or design does not infringe on others' rights.

Georgian Legal Framework and Regulations

The audit process relies on key Georgian laws in the field of intellectual property. The Law of Georgia on Trademarks and the Patent Law of Georgia define the validity of registrations and the terms of rights. The Law of Georgia on Copyright and Related Rights regulates the origin and transfer of rights to works (including software). During the audit, compliance with the Law of Georgia on Competition is also checked to rule out unfair practices. Information is retrieved from Sakpatenti databases and court registries. The Civil Code of Georgia serves as the basis for analyzing contractual relationships (licenses, assignments).

Service Process Step-by-Step

IP Audit is a structured process consisting of the following stages:

  1. Defining Objectives: Establishing the scope of the audit with the client (full check or specific asset).
  2. Information Gathering: The lawyer requests documentation from the company (certificates, contracts) and obtains public information from registries.
  3. Analysis and Evaluation: Legal examination of obtained documents, identification of risks (e.g., expired registrations).
  4. Detecting Flaws: Identifying "red flags" such as unclear rights to code or conflicting trademarks.
  5. Report and Recommendations: Preparing a detailed conclusion outlining discovered issues and ways to rectify them.

Why Choose Legal.ge?

On Legal.ge, you will find lawyers who specialize specifically in intellectual property audits. This is a niche specialization that requires not only knowledge of the law but also an understanding of business specifics. Experts selected through our platform will provide you with an objective and comprehensive picture of your or your target company's IP assets, saving you money and avoiding future risks.

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Specialists for this service

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