What evidence helps a lender or valuer assess an unregistered IP asset?

Separate the asset, the rights and the recovery question

For unregistered software, designs and confidential know-how, there may be no public IP register identifying the asset and its owner. The company must provide records that let someone outside the business examine what exists, what protection and rights it relies on, and how the asset produces a commercial benefit.

The opening chapters of Financing Unregistered Innovation distinguish three issues: whether the asset qualifies for legal protection, whether the company holds rights it can offer as security, and what a creditor could recover after default. Development records help establish what was created and when. Agreements and other legal records support the company’s rights, while technical documentation and access arrangements help assess whether another operator could use the asset.

Consider a manufacturer whose confidential calibration method reduces rejected products. A valuer needs to assess the benefit attributable to that method. If a lender is considering it as collateral, it also needs to understand what could be recovered or transferred if the borrower could no longer repay. The method’s value inside a functioning factory may differ substantially from its value to a buyer without the original team or equipment.

Identify what exists and what supports its protection

Provide the exact version being assessed, with a description of its boundaries and the records explaining its development. For the calibration method, that might mean operating instructions, parameter tables, test procedures and dated trial results. Link important milestones to contributor records and any matching timestamp certificates. See how to identify the exact asset under review.

The evidence of protection depends on the asset:

• Confidential know-how: identify the information treated as secret and the measures used to control access and disclosure. Explain why its confidentiality contributes to its commercial benefit.
• Software: identify the relevant code and contributors, distinguishing original development from third-party components and the permissions governing them.
• Unregistered designs: identify the design and the creation or disclosure events relevant to the particular protection claimed, including their dates and locations. Have the applicable conditions and remaining term assessed.

Timestamped records help make the chronology and integrity of particular files checkable. They do not establish that all legal conditions for protection are satisfied. For example, a certificate for a process description does not demonstrate that everyone receiving it was subject to confidentiality obligations.

If earlier records are incomplete, identify which dates and events the available evidence supports. See building evidence now for work developed in the past.

Show which rights the borrowing company actually holds

Connect the asset to founder and contributor assignments, employment records, collaboration agreements and incoming licences. Identify the legal entity holding the rights, any joint owners, rights already granted to others and restrictions relevant to continued use or transfer.

For the calibration method, the company may hold the rights to use and license its confidential parameter tables but rely on supplier software to run them. The supplier licence and any required consent matter to the assessment even though the software is excluded from the company’s own know-how asset.

Where security is proposed, provide existing financing documents and relevant records of earlier security interests for legal review. The advisers must assess whether and how a lender can take security over the asset, where its claim ranks against other creditors and what it could do if the borrower defaults. An asset inventory or digital certificate does not perform those legal steps.

Connect commercial claims to underlying records

Show how the defined asset is used and provide the records behind the claimed benefit. A useful evidence package connects the technical material to operations and then to financial results.

In the manufacturing example, fewer rejects after introducing the method are relevant, but other changes may explain part of the improvement. Record equipment upgrades, input changes and operator training during the same period. Let the valuer distinguish the contribution of the know-how from the contribution of other assets and people.

Similarly, total revenue from a software business is not automatically revenue attributable to one codebase. Customer relationships, support services, brands and other technology may contribute. Explain the allocation used and identify assumptions that still need testing.

Distinguish recorded results from valuation assumptions

Provide historical records separately from forecasts. If the method is still at pilot stage, describe the trials and the assumptions needed to extend them to commercial production. Do not present expected savings as savings already achieved.

Development expenditure can explain the resources invested and inform a cost-based assessment, but it is not automatically the asset’s value. Forecast income, comparable transactions and replacement costs serve different valuation approaches. The UK Intellectual Property Office’s valuation guidance explains their limitations, including uncertainty about future benefits and the difficulty of finding comparable transactions.

Agree the valuation purpose, date and scope with the valuer. A valuation for continued use in the business may involve different assumptions from a sale following default. WIPO’s guidance highlights economic benefits and, for collateral financing, continued validity and marketability. A valuation figure is an input to a credit decision, not a commitment to lend that amount.

Document what another operator would need

For the calibration method, could a qualified operator reproduce the process from the preserved instructions, or does it depend on choices only the founder understands? Provide evidence of handovers, training or reproduction trials where available, identifying what was tested and by whom.

For software, include build and deployment instructions, dependencies, maintenance requirements and the permissions needed to continue operation. For encrypted material, document who controls access and the agreed process for authorised access if the borrower cannot cooperate. Keep credentials and keys outside the general review package.

Identify obstacles such as non-transferable licences, specialist equipment, missing documentation or dependence on particular people. Technical access, legal permission to use the asset and the existence of a willing buyer are separate questions. Preserving files alone does not resolve them.

The paper also distinguishes lending against a specific asset from financing based on royalties, customer payments owed to the business or the wider business itself. The evidence should match the proposed route: records of dependable contracted income may matter more in one case, while transferable technical material and a credible recovery plan matter more in another.

Preserve the basis of the assessment

Keep a dated package identifying the asset version, supporting records, assumptions and unresolved issues supplied for review. Certify that package where appropriate and retain the exact files and verification material. Record later changes to the asset, its licences or its commercial performance so an earlier assessment is not silently applied to a different situation.

Use staged confidential review where the supporting material contains sensitive know-how. The lender or valuer should be able to identify what was examined directly, what relied on an expert report and what remains unverified.