Most start-ups build their entire value around innovations, code, brand and technology, yet very few have ever properly checked what intellectual property they actually own, whether they truly own it and what is still at risk.
An IP audit closes that gap, and it is one of the most valuable exercises a growing business can undertake before it scales, raises capital or sells. An audit turns assumptions about your IP into certainty.
At IP Guardian, we regularly work with start-ups who assume their IP position is solid, only to discover gaps during due diligence that could have been fixed months or sometimes years earlier. Let’s work together and find them first.
What is an IP audit?
An IP audit is a structured review of every piece of intellectual property a business owns, uses or relies on. It covers registered rights such as patents, trade marks and designs, along with unregistered assets such as copyright, trade secrets, confidential know-how and domain names.
It comes down to three questions:
- What IP does the business actually have
- Does it legally own, or have the right to use, all of it
- Is that IP properly protected against copying or infringement
Why IP audits matter for start-ups
Start-ups are some of the most at-risk businesses when intellectual property matters are concerned. Here are some of the key reasons why IP support for start-ups matters:
1. Fundraising and investor due diligence
Investors and their lawyers will almost always dig into IP ownership as part of due diligence. Gaps, such as unassigned contractor work or unregistered trade marks, can slow down a round of funding or derail funding altogether.
2. Avoiding ownership disputes
Founders often assume that because they paid for something, the business owns it. That is not always true under Australian law. Disputes over ownership can surface at the worst possible time, such as during a sale or after a co-founder departs.
3. Reducing infringement risk
A start-up that has not checked whether its brand name, product design or technology conflicts with someone else’s registered rights may be building on borrowed time, with a rebrand or redesign only a cease and desist letter away.
4. Protecting what you have built
Unregistered rights are generally weaker and harder to enforce. An audit shows you which assets are worth registering before a competitor gets there first.
What an IP audit should cover
- Patents covering any novel products, processes or technology, including any not yet filed
- Trade marks covering your business name, logo, taglines and any product or service brand names
- Registered designs covering the visual appearance of any products you have developed
- Copyright in your code, website content, marketing material, technical documentation and creative assets
- Trade secrets and confidential information, including algorithms, processes, client lists and other know-how not otherwise protected
- Domain names and social media handles tied to your brand
- Existing contracts, including employment agreements, contractor agreements, licensing arrangements and any agreements with co-founders or early collaborators
Common ownership pitfalls for start-ups
If you own a start-up, or are just getting started on your journey, it pays to understand common IP issues and get on top of them before they can arise.
1. Contractor work without an assignment
Under Australian law, an independent contractor or freelancer generally owns the copyright in what they create, even if your business paid for it, unless there is a written agreement assigning those rights to you. The rules differ for other types of IP. For example, a business that commissions a design under a contract is generally entitled to the registered design rights unless agreed otherwise. Written assignments should therefore cover all IP, not just copyright.
This is one of the most common gaps found in start-up IP audits, particularly around early website builds, branding and code written before formal contracts were in place.
2. Employee IP without clear terms
Where a genuine employee creates work under the terms of their employment, the employer generally owns the copyright under section 35(6) of the Copyright Act 1968 (Cth), unless the parties have agreed otherwise.
Problems tend to arise around the edges, such as side projects, work done before formal employment began or unclear contracting arrangements dressed up as employment. Inventions are different again. No statute decides who owns an employee’s invention, so ownership depends on the employment contract and the general law.
3. Founder IP never assigned into the company
It is common for a founder to develop an early prototype, brand name or piece of code before the company even existed, then simply keep working on it without ever formally assigning that pre-existing IP into the business. This can leave the company without clear title to assets it has been relying on since day one.
4. No trade mark protection despite active trading
Many start-ups trade under a name and logo for years without ever registering it, assuming that use alone is enough. Unregistered rights offer far weaker protection, and if someone else registers a similar mark first, you may face a costly and uncertain fight just to keep using your own brand.
How to protect what you find
Auditing is the first step. What comes next is to protect your business by addressing the results of the audit.
- File trade mark, patent or design applications for any IP identified as commercially important and not yet protected
- Put written IP assignment clauses in every contractor and agency agreement, so ownership is confirmed as work is delivered rather than assumed after the fact
- Get written moral rights consents from individual creators, since moral rights stay with the person who created the work and cannot be assigned
- Include clear IP ownership clauses in employment contracts, covering work created in the course of employment
- Use non-disclosure agreements before sharing confidential information with contractors, investors or potential partners
- Formally assign any pre-existing founder IP into the company through a written deed, particularly before a funding round
How to manage your IP going forward
Learning from common mistakes will ensure that any future intellectual property issues are addressed promptly:
- Maintain a central register of all IP assets, including registration numbers, renewal dates and who owns what
- Review the register periodically, not just when a transaction is imminent
- Track renewal deadlines for registered patents, trade marks and designs so protection does not lapse
- Reassess your IP position before any major milestone, including a funding round, new product launch or expansion into a new market
- Revisit contractor and employment templates regularly to confirm IP clauses are current and being used consistently
Practical steps for implementing an IP audit
If you’re ready to begin your own IP audit, here are the steps we would recommend taking to ensure you are getting it right the first time.
- Gather your documents. Collect employment agreements, contractor agreements, any existing registrations and records of what has been developed and by whom.
- List every IP asset. Work through your products, brand, technology and content systematically, rather than relying on memory alone.
- Check ownership for each asset. Confirm whether the business holds clear title, particularly for anything created by a contractor, agency or founder before incorporation.
- Run clearance searches. Check whether your brand name, product design or technology conflicts with existing registered rights before you invest further in it.
- Prioritise gaps. Identify which unprotected assets are commercially important enough to register now, rather than trying to fix everything at once.
- Put ownership issues right. Use written assignments and licences to formalise ownership of anything currently unclear.
- Build a maintenance routine. Set a schedule to review the register, track renewals and repeat the audit before major milestones.
IP Guardian, the experts in IP for start-ups
Start-ups move quickly, and IP is often the first thing to fall behind. At IP Guardian, our registered attorneys help early-stage businesses identify what they actually own, fix ownership gaps before they become a problem and build a practical IP strategy that supports fundraising, growth and eventual exit.
Servicing Sydney, Melbourne, Brisbane, Adelaide and the Gold Coast, our team is here when you need us. Contact IP Guardian today on 02 9071 0130.
