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IP Due Diligence

Due Diligence

The importance of a Due Diligence analysis cannot be over emphasized when entering into a relationship that requires the buying, selling, licensing or franchising of intellectual property. McHale | Slavin provides valuable assistance in matters involving technology-intensive companies entering into acquisitions, joint ventures, or investment arrangements by third-party entities by conducting a Due Diligence investigation of the intellectual property assets and liabilities of the target company. These results can be very useful in determining the propriety of the transaction, and can often point toward issues that may require further analysis. Performance of a thorough Due Diligence analysis is of benefit to all parties involved and often assists in the formation of optimal business relationships.

A Due Diligence investigation during merger/acquisition discussions, when buying or selling IP, or in conjunction with negotiating a license or franchise agreement should stress the following:

  • Defining the ultimate goals of the transaction;
  • Clarifying what is being acquired or sold, and what are the obligations of the parties;
  • Performing a complete search on IP ownership, and determination ensure that rights remain in force;
  • Determining the presence of cross licenses or conditions which might affect or restrict the usage of the IP rights contemplated for purchase/sale;
  • Requesting details of any improvement patents that might exist;
  • Ascertaining whether the IP is the subject of any litigation or infringement suits;
  • Requesting details regarding any significant third parties;
  • Ensuring that the seller has the right to sell the IP.

Each transaction will have its own characteristics and requirements. In our experience, this is best accomplished by working with a law firm that has a broad base of expertise and experience with the full array of businesses ranging from small start-ups to large corporations. Some intellectual property assets may require closer evaluation than others due to factors such as complexity, competition and foreign registration. Rights may range from ownership to licenses, and may include agreements regarding contingent rights in intellectual property to be developed in the future. A viable evaluation also includes analyzing any prior grants that may impact or dilute the value of the assets and also assessing potential intellectual property infringement claims.

Our firm understands the necessity of providing the right legal team to conduct IP Due Diligence. Our understanding of the industries, business environments and client objectives allows us to focus on the assets and the relative importance to the client. We are experienced with drafting due diligence requests and undertaking further investigative activities as necessary including: searches; opinions; review of agreements; and other appropriate efforts. Many transactions are increasingly cross-border and will involve an understanding of complex IP treaties and conventions as well as an understanding of U.S. laws and regulations. In addition to our experienced attorneys and registered patent agents, our firm has a network of foreign affiliates who can assist us with such transactions. We understand the scope and nature of due diligence will vary according to the type of asset. Our understanding of intellectual property law, the industries, and technologies position us to assist clients with analyzing IP assets and arriving at equitable terms. Contact us for additional information or to schedule a consultation.