Key points
- Work created before incorporation, or by freelancers and agencies, belongs to its creator until it is assigned in writing.
- Employees’ copyright work belongs to the employer, but Indian law has no automatic rule for employees’ inventions.
- Register the brand in the company’s name, and file patents and designs before the product is shown.
- Open-source licences, trade secrets and personal data are now part of most due diligence questionnaires.
Every due diligence questionnaire a startup receives asks some version of the same question: does the company own the intellectual property its business depends on? The honest answer is often “mostly”. The gaps are rarely dramatic. They are the code the founders wrote before the company existed, the logo an agency designed, or a trade mark filed in a co-founder’s name. Each is easy to fix early and awkward to fix in the middle of a funding round.
1. Work done before the company existed
Founders usually start building before they incorporate. Whatever they created then belongs to them personally, not to the company. Copyright passes only by a written assignment signed by the author (section 19 of the Copyright Act, 1957), and an assignment or licence of a patent or patent application must be in writing and registered with the Patent Office to be relied on (sections 68 and 69 of the Patents Act, 1970). A short founders’ IP assignment, signed and stamped, closes the gap.
2. Employees
For copyright, the rule favours the employer: a work made by an employee in the course of employment under a contract of service belongs to the employer unless they agree otherwise (section 17). For inventions there is no equivalent statutory rule, so employment contracts should include an express assignment of inventions and a duty to help with filings. Both should sit alongside confidentiality obligations that continue after the employee leaves.
3. Freelancers, agencies and consultants
This is the most common gap. A freelancer who writes code or designs a logo owns the copyright unless it is assigned in writing. If the assignment does not say how long it lasts or where it applies, the Copyright Act treats it as five years and India only. Authors also keep moral rights under section 57 even after assignment, so agreements usually record the author’s consent to changes and to use without credit, as far as the law allows. Check every contractor agreement for an assignment, not just a licence.
4. The brand
- Search before you launch, so you are not building a brand someone else already owns.
- File in the company’s name, not a founder’s, and in the classes that cover the products you plan as well as those you sell.
- Hold the domain names and social media handles in company accounts.
DPIIT-recognised startups pay reduced fees for trade mark applications.
5. Inventions and designs
File before you disclose. Showing an invention or a product design publicly before filing can destroy novelty. India’s exceptions are narrow: a patent application can survive certain disclosures, such as a display at an exhibition the government has notified or a paper read before a learned society, only if it is filed within twelve months (section 31 of the Patents Act). For designs the only similar exception is for display at an exhibition the government has notified, with six months to file (section 21 of the Designs Act, 2000). Startups get an 80% reduction in patent fees and can request expedited examination. If an inventor is resident in India, foreign filing permission rules apply before filing abroad (section 39).
6. Open source
Most software is built on open-source components. That is not a problem in itself, but some licences, particularly “copyleft” licences such as the GPL, require you to release your own source code if you distribute software that incorporates the licensed code. Keep a list of the components you use and their licences; investors increasingly ask for one.
7. Trade secrets
India has no trade secrets statute, so protection depends on contracts and conduct: NDAs with partners, confidentiality obligations for staff, access controls and a record of what is confidential. See our trade secrets practice.
8. Personal data
If the product collects personal data, investors will ask about the privacy policy, consent flows and vendor contracts, and about readiness for the Digital Personal Data Protection Act, whose main obligations apply from 13 May 2027. See The DPDP Rules, 2025: what applies when.
A short checklist
- Founders’ IP assignment to the company, signed and stamped.
- Invention assignment and confidentiality clauses in every employment contract.
- Written assignments from every freelancer, agency and consultant.
- Trade marks filed in the company’s name; domains and handles in company accounts.
- Patent and design filings made before public disclosure.
- A register of open-source components and their licences.
- NDAs and access controls for confidential information.
- A privacy policy and a plan for DPDP compliance.
Our free IP Health Check works through most of these questions in about fifteen minutes.
Sources
This article is for general information and states the law as at 12 October 2026. It is not legal advice. For advice on your situation, contact the firm. Published by BRB Legal.
