Why Due Diligence? Part II

 

More than ever, every business deal counts; the stakes are high.  A company depends on making profitable alliances whenever it embarks on a new partnership or licensing venture, or acquires another enterprise or extends credit.  In any business transaction that involves IP, a company is relying on the worth of that IP to substantiate the financial success of the transaction.  That IP is an asset so long as the company has factored all precautionary examinations into its true merit.  An IP due diligence investigation is both a preventative measure against disappointment and calamity and an activist effort to make the most of every transaction.  This investigation will advance a company in:

  •  Understanding the IP rights and valuation:
    • Identifying the true ownership and control rights  of what the company  is buying, licensing or financing
    • Understanding the economic significance of what the company is buying, licensing or financing
    • Determining the scope of the IP rights (e.g., the scope of patent claims)
    • Determining the validity of the IP rights
    • Identifying the value of the IP rights
    • Maximizing licensing and other business exploitation and development prospects
    • Plugging acquired IP assets into new and emerging markets

 

  •  Determining Potential Restrictions, Liabilities or Infringements
    • Safeguarding against buyer’s remorse
    • Knowing that the history of the IP rights bought or financed is “clear”
    • Understanding the obligations the company may be undertaking toward any third parties
    • Determining any litigation or financial encumbrances on the IP bought or financed
    • Ascertaining any usage restrictions of the IP rights bought or financed
    • Ascertaining expiration dates of IP grants, registrations, licenses, and renewals
  •  Determining Potential Restrictions, Liabilities or Infringements
    • Safeguarding against buyer’s remorse
    • Knowing that the history of the IP rights bought or financed is “clear”
    • Understanding the obligations the company may be undertaking toward any third parties
    • Determining any litigation or financial encumbrances on the IP bought or financed
    • Ascertaining any usage restrictions of the IP rights bought or financed
    • Ascertaining expiration dates of IP grants, registrations, licenses, and renewals

These series of articles are written by two of our industry expert attorneys, Laurie Hughes and Suzanne Kessler.

Next article:  Due Diligence Part III

BACKGROUND:  Typical Company Scenarios

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149 Responses to “Why Due Diligence? Part II”

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