How to make the IP portfolio attractive to a US investor
Disclaimer: The information provided in this factsheet is meant as an educational resource only and should not be construed as legal advice.
- What are US investors looking for?
- High potential companies offering innovative products or services - investors are looking for the next unicorn.
- Companies with great potential to increase value with minimum risk.
- US investors will be looking for IP assets that are protected in the US, especially by way of allowance, but at least with prosecution underway.
- Filing conventional applications in the US as soon as possible is important in attracting investors.
- Companies should make sure that their IP portfolio files are up to date and well organized.
- Investors want to make sure the entrepreneurs understand enough about IP to have a pragmatic and cost-efficient IP strategy that covers all types of IP, including trade secrets.
- Maintaining a long-term (2-3 year) budget in line with an IP strategy will help investors understand the long-term cost of that strategy to make sure their funds are being used appropriately.
- Cataloguing meta-data on trade secrets to showcase value.
- Documenting processes and policies.
- Intentional use of Open-Source software including policies, regular audit and compliance checks.
- Investors want to maximize the long-term value of the company’s IP assets.
- Companies can show their commitment to ensuring long-term value of their IP portfolio by keeping patent families open through filing continuations in the US
- Investors will be interested in understanding the existing IP landscapes and what competitors own in terms of IP.
- Companies should undertake regular landscape and competitor searching as part of their IP strategy.
- Clean ownership of IP for existing and future assets is essential for investors.
- Companies should make sure that employment agreements include IP assignment and trade secret clauses (including founder agreements) and are properly signed.
- For more information, please refer to this factsheet released in 2022: Hiring employees and contractors in the United States.
- To decrease risk of losing IP before it is properly protected, the investors will want to make sure all employees have basic IP literacy knowledge, including the rules around public disclosures.
- Companies should invest in the IP literacy and education of their employees to make sure that they are enabling an innovation minded culture in their workplace.
- Depending on the stage of the company, proper brand registration and ownership will be expected by the investors.
- Trademarks should be properly registered and denoted, copyrighted work should be emphasized, licensing agreements should be well-documented and up to date.
Key considerations for Canadian companies:
- During due diligence, investors will analyze the company’s IP in detail and typically focus on ensuring that the chain of ownership is clean and that there is no encumbrance. Having the IP portfolio well organized will help streamline the process.
- “US investors judge the company’s management capability on how well their IP is managed and how well their IP strategy is articulated,” says Natalie Giroux, President at Stratford Intellectual Property.
Additional information:
- For information about IP protection in the US, please see the Canadian Intellectual Property Office’s publication on Doing business abroad: Protecting your IP in the United States
- For material relating to the export of goods to the US, please see the Doing Business in the United States webpage.
- For more information on going global with your IP, visit ca/export-ip
