Intellectual property (IP) due diligence is the process that the TTO will undertake in partnership with its originators to ascertain the origins of the IP. This process includes understanding the work done to create the IP, how the work was funded, who was involved in the development of the IP and if any third parties hold rights in the relevant IP.

Some aspects of due diligence will relate to ensuring an understanding of the size of the commercial opportunity, but overall, the most important aspect of this activity is to precisely define the IP, ascertain the provenance (especially ownership, who was involved, and any third-party involvement), and provide assurance that the university has the right to licence the IP.

After an IP originator submits their idea on a university invention disclosure form identifying the types of IP in their innovation, the first step towards commercialisation has been initiated. Different types of IP have different protection mechanisms, and the TTO will help to identify the broadest protection possible so that the IP originator group has the best opportunity for commercialisation. The protected IP will be key to securing commercial interest and the value of the licensing deal.

Each University TTO will have a strategy to protect IP, and as resources are limited, the IP originator group will be requested to justify the level of protection they are seeking in the case of an invention/patent (application), as the costs can be considerable.

In the UK, IP is generally owned by the employer under employment law. However, there are exceptions, for example, when students (who are not employees) are involved, or when research funding agreements specify alternative ownership terms. Additionally, if multiple research institutions contributed to the work, joint ownership of the IP may apply.

Determining and managing IP ownership is the responsibility of the TTO. If any IP originator is uncertain about whether they or the university owns a particular piece of IP, they should contact the TTO. They will explain the basis for their ownership assessment and will be open to discussing any questions or concerns that arise.

As part of the due diligence process, the TTO may identify potential barriers or restrictions that could affect how the IP can be licensed. These are known as encumbrances and must be carefully assessed and addressed with appropriate solutions.

Encumbrances are fairly common and can include:

• research funder or sponsor terms, such as requirements for written consent before commercialisation or obligations to share revenue from licensing
• joint ownership of IP, where another institution or partner may hold rights. In some jurisdictions, commercialisation may require written permission from all co-owners
• collaborative research agreements, such as those arising from consortium or partnership programmes. These often include clauses that give one partner the option to negotiate rights to another partner’s IP, but only when that IP is needed to commercialise their own results.

It’s important to note that such rights are not automatic. They must be specifically notified, negotiated, and agreed upon. If your IP originated from a collaborative project, you are expected to be aware of any associated licensing terms, as they may require additional steps before a licence can proceed.