IP Due Diligence Failures in Indian Creative Startups: A Copyright-Centric Analysis

Abstract

For creative startups across India, copyright sits at the heart of both commercial value and legal exposure. Sectors ranging from music technology and gaming to over-the-top content platforms, animation, and fashion-tech routinely conduct copyright due diligence that is cursory at best and completely absent at worst. The fallout is well documented in Indian courts: failed funding rounds, post-acquisition ownership disputes, contested licensing injunctions, and investors left holding liabilities they were never warned about. Less examined is whether these failures follow a recognisable pattern and whether that pattern reflects something structural rather than merely accidental. This paper argues that it does. Three underlying conditions are identified. First, the Copyright Act 1957 contains provisions on assignment, rights reversion, and moral rights that routinely catch out even legally trained founders. Second, early-stage Indian ventures are built on informal creative arrangements where contracts come later, if at all, leaving ownership unresolved at precisely the moment it matters most commercially. Third, regulatory uncertainty around collective licensing and statutory broadcasting rights has been serious enough that entire revenue models have been constructed on legally unstable ground. Taken together, these conditions generate a systemic vulnerability that this paper examines in depth and proposes frameworks to address

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