Intellectual Property Rights Mistakes During Venture Capital Due Diligence 

When an enterprise is ready to be launched, it makes a lot of sense to take a little time to look at things from the customer’s viewpoint in order to enhance the venture’s chances of success.

 It can be hard for a manufacturer to step into the customer’s shoes, and involvement in technical and logistical details may blur the most important factor in running a business – customer satisfaction

Common mistakes and how they can be

Rectified or Avoided

These mistakes all have one thing in common:

The customer is not the focus in such cases.


The primary objective of sales material is to engage the customer at the first level of interest, and this interest should be followed up appropriately. But in order to get the prospective customer’s attention in the first place, you should avoid making the mistakes discussed below

1 | Leaving patent applications too late 

How do you avoid this mistake?

There are certain rules that apply to patent applications, and non-compliance with these rules could mean that a company loses out on the advantages offered by protecting intellectual property. It is best to make patents applications as soon as possible, so that there is no chance of missing out

2 |Excessively narrow claims 

Many entrepreneurs make the mistake of making patent claims that are insufficiently broad in their scope. Such narrow definitions for patent claims mean that a rival enterprise can easily circumvent the patent claims, and exploit the invention or innovation for its own ends. It is not easy to decide on the scope a claim should encompass, but it is important to include as wide a definition as possible

3 | Willful infringement 

Wilful patent infringement will be punished, and enterprises infringing on another venture’s patent will have to pay heavy fines. So steps should be taken to ensure that neither accidental nor deliberate patent infringement takes place.  

4 | Protecting software only with copyrights 

Copyrights are not very expensive, and safeguarding intellectual property with the use of copyrights is quite common. But while this is effective for certain kinds of work, reverse engineering on some material can help a competitor understand it thoroughly, and use it to his or her own advantage. In such cases, it is better to protect intellectual property with a patent as well as a copyright.  

5| Unspecified ownership of intellectual property 

Sometimes the intellectual property of an enterprise is jointly owned by several parties – employees, consultants, customers and vendors may all have contributed to a particular innovation. So it is important to clearly identify the ownership of any intellectual property so that problems that competition could take advantage of do not arise later.  

6| Failing to take legal implications into account  

If the legal implications are not taken into account, especially with regard to amended claims and scope of patents, various problems can arise. The doctrine of equivalence should be understood clearly in this context. 

7| Failing to emphasise the significance of confidentiality 

Trade secrets and confidential information that the employees of an enterprise are privy to should be carefully safeguarded while, for instance, patents are pending. Non-disclosure agreements with employees will be useful in this regard. A failure to attend to this aspect of intellectual property protection could cost an enterprise dearly

8| Neglecting to exploit the benefits of tax shelters  

A new enterprise should not omit to use offshore strategies that will cut down on tax payments. When you want to protect your intellectual property rights at a global level, you will find that global tax strategies, wisely applied, will make things easier as far as taxes are concerned

9| Slow response to notifications from patent authorities 

To avoid delays, act quickly when required by the patent authorities in your area. See that legal requirements are met promptly, especially if there are claims against your patent

10| Cost cutting on legal expenses 

With the aim of saving money, some enterprises hire patent professionals based on the low fees they charge, but this could prove unwise in the long run. It is essential to hire professionals who are highly competent as well as experienced, and it is worth paying the higher fees that skilled patent lawyers charge.