Quick Answer
Before executing a venture capital term sheet or welcoming institutional investors into a data room, technology startups must conduct a rigorous IP health check. Institutional investors conduct extensive legal due diligence to ensure that the corporate entity possesses unencumbered title to all code, brand assets, and proprietary technology. The essential pre-fundraising checklist covers four critical pillars: (1) irrevocable Founder and Contractor IP Assignment Agreements, (2) formal Trademark applications across primary and expansion classes, (3) Provisional Patent specifications filed prior to public demonstration, and (4) Open-Source Software (OSS) compliance audits eliminating viral copyleft liabilities.
Key Takeaways
- Entity Ownership is Non-Negotiable: Intellectual property created prior to incorporation belongs to individual founders unless assigned via written agreement supported by consideration.
- Lock Priority Before Demos: Pitch decks, public hackathons, or accelerator demo days can destroy patent novelty if provisional filings are not secured in advance.
- DPIIT SIPP Benefits: Recognized startups can avail themselves of government-funded patent facilitators and 80% statutory fee waivers.
- Clear Trademark Titles: Investors demand evidence that the company's operating name and logo have received at least examination clearance or advertisement in the Journal.
The 8-Point Pre-Fundraising IP Checklist
1. Founder IP Assignment Agreements
Ensure that every co-founder has executed a comprehensive, irrevocable IP Assignment Agreement transferring all inventions, code, designs, and domain names created prior to company incorporation to the Private Limited company, waiving all moral rights under Section 21 of the Copyright Act.
2. Independent Contractor & Vendor Agreements
Under Indian copyright law, work created by independent contractors or agencies does not automatically vest in the hiring company without an express written assignment under Section 19. Ensure all freelance developers, agencies, and UI designers have signed assignment deeds.
3. Trademark Registration Applications
Verify that trademark applications (Form TM-A) are filed in the company's corporate name (not an individual founder's name) covering both core technology classes (Class 9, 42) and commercial application classes (Class 35, 36, etc.).
4. Provisional Patent Filings for Proprietary Tech
For deep-tech, IoT, biotech, or algorithm-driven startups, file provisional patent applications before releasing beta builds or presenting at demo days to establish international priority without disclosing final source code.
5. Open-Source Software (OSS) Audit
Run automated scans (such as FOSSA or Black Duck) across all production repositories to confirm that no third-party libraries licensed under restrictive copyleft terms (GPL, AGPL) are statically linked into proprietary modules.
6. Trade Secret & Employee Exit Protocols
Establish strict access controls, repository permission tiers, and standard employment agreements containing non-disclosure and confidentiality obligations that survive termination of employment.
7. Domain Portfolio & Social Handles
Ensure that all primary brand domains (.com, .in, .ai) and social media handles are registered under corporate administrative emails, preventing administrative hijacking by departing personnel.
8. Virtual Data Room (VDR) Schedule Preparation
Organize all IP registration certificates, application acknowledgments, search reports, and assignment deeds into an indexed legal data room ready for investor counsel inspection.
Preparing for an Upcoming Funding Round?
Our venture IP attorneys conduct rapid pre-funding IP audits, draft bulletproof founder assignments, and prepare data room schedules to ensure your diligence proceeds smoothly.