IP Due diligence
Whether a transaction is
- purchase / sale of IP rights
- initial public offerings (IPOs),
the receiving party should have an adequate overview of the rights and obligations accompanying the transaction. The receiving party should accumulate all information relevant to assess the right values and potential risks associated with the deal.
In addition, a potential buyer would often tend to direct its due diligence to look for factors that may indicate increased risks and reduced values, which could help talk the price down.
In contrast, a seller would usually try to present the values and risks of his rights as optimistic as possible in order to increase the price.
Whatever rights that may add value to the buyer, a thorough analysis of IP rights before they are acquired, does provide an educated basis for negotiating the price and terms of the transaction, which is in the interest of both buyers and sellers.
Patent due diligence
In terms of patent rights, due diligence is particularly relevant for transactions, which involve technology-intensive enterprises, which are often highly dependent on patents and protection of technical information.
Trademark due diligence
To the extent that trademarks and other business characteristics represent the greatest value for the purchaser, the due diligence analysis often focuses on trademark rights.
Due diligence analysis
In an IP due diligence analysis, at least the following points should be addressed:
- Geographical extent of protection (the size of the market covered)
- Age of the rights (how long is the market covered)
- Scope protection conferred by the rights (how easily can competitors can design around the rights)
- Has rights have already been challenged in opposition / litigation (give clues about the portfolio's importance and strength)
- The quality of the rights (what is the likelihood that they can withstand attacks)
- Ownership (do you speak with the rightful owners)
- Inventors (are the correct inventors indicated)
- Is there any secret know-how (and is it kept secret)
- The portfolio’s relevance to the transaction (is it central or peripheral for the transaction)
- Is there freedom-to-operate (can you enter the market at all)
Preparing a portfolio for due diligence
We have a proven model for preparing a portfolio due diligence, which take the most questions into account even before they are asked
Therefore, we ensure that the discussions in the due diligence only relate to the essential issues of the transaction and are not flooded by inessential queries of minor importance.
It goes without saying that we create an overview of the portfolio and can establish a data room, whether it is physical data or virtual data room.
In addition, in cooperation with you we would often consider and evaluate the buyer / licensee’s motives for the transaction, so that we can prepare presentation materials showing the portfolio's value.
Planning due diligence analyses
We often conduct due diligence analyses for transactions involving IP rights.
The aim of the analysis is almost always to provide answers to the questions above. However, the individual questions can have different weight depending on the transaction in question.
The analysis is therefore always conducted in close cooperation with our clients in order to ensure that we get answers to all questions of pertinence for the specific project.