Protecting IP in a Startup

Making sure your company, not a founder, contractor or agency, owns the IP investors are paying for.

For many startups, intellectual property is the business: the code, the brand, the data and the know-how. Yet IP is often created before the company exists, by founders, freelancers and agencies under informal arrangements. Investors and acquirers will check that the company owns its IP. Gaps found during due diligence can delay or derail a funding round or sale.

Where we assist

  • Founder IP assignments: transferring IP created before incorporation into the company.
  • Employment and contractor agreements: IP and confidentiality clauses that actually work.
  • Agency and developer contracts: securing ownership of outsourced code and design.
  • Brand protection: trade mark searches and registrations before launch.
  • Open source: reviewing licence obligations in your codebase.
  • Investor readiness: IP audits and clean-up before a raise or exit.

The most common gap

Code or designs built by a co-founder before the company was formed, or by an outside developer without a written assignment, may still belong to that person. Under the Copyright Act, an assignment must be in writing and signed. Fixing this early is far easier than fixing it during a funding round.

Confidential information

Ideas, algorithms, customer lists and business plans are not protected by registration. They are protected through confidentiality agreements, access controls and the common law of unlawful competition, so NDAs and good internal practices are essential.

When to act

Ideal moments to get IP right:

  • At incorporation, before work continues outside the company.
  • Before hiring the first employees or contractors.
  • Before pitching to investors, partners or accelerators.
  • Before launching a brand or product publicly.
  • Before a funding round or term sheet.
  • Before restructuring or moving IP to an offshore holding company.

Our IP clean-up process

A clear path to an investor-ready IP position.

  1. IP audit
    We identify the company’s key IP assets and who created each of them, and under what arrangements.
  2. Close the gaps
    We prepare founder, contractor and agency assignments and update employment contracts.
  3. Register what can be registered
    We file trade marks and, where appropriate, patents and designs.
  4. Protect confidential information
    We put NDAs, access controls and policies in place.
  5. Due diligence pack
    We prepare a clean IP schedule and supporting documents for investors and acquirers.

Moving IP out of South Africa, for example as part of a flip to an offshore holding company, can trigger exchange control and tax consequences. Get advice before any IP is transferred offshore.

GET IN TOUCH

What to prepare

Helpful information for a first meeting.

  • A list of founders, employees and contractors who created key IP.
  • Any existing contracts, NDAs and shareholders’ agreement.
  • Details of your brand names, logos and domains.
  • A summary of your technology stack and any open-source components.
  • Your funding or exit timeline.

Common Questions

No. IP created by a founder before the company existed, or outside an employment relationship, belongs to the founder unless it is assigned to the company in writing.
Unless there is a written assignment, the freelancer usually owns the copyright in the code they wrote, even if you paid for it. A signed assignment is essential.
Yes. IP ownership is a standard part of investor due diligence and is usually backed by warranties in the investment agreement. Gaps can delay the deal, reduce the valuation or require conditions to be met before funding.
It is strongly recommended. Registering a company or domain name does not give trade mark rights, and rebranding after launch because of a conflict is expensive.
It is possible, but it has exchange control and tax implications and must be properly structured and approved where required. We advise on this together with your tax advisers.

BUILDING A STARTUP?

We help founders secure their IP, satisfy investors and avoid costly gaps in ownership.

Read more: Startups · Trade mark registration · Patents & designs

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This page is general information and not legal advice.

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