For any company, mergers & acquisitions represent a significant investment of time and capital. The decisions made can have a profound impact on the health of the company, so they must be well-informed decisions. But one area that is frequently overlooked during the process is that of intellectual property.
What is IP due diligence?
Conducting due diligence is a critical component of any merger & acquisition. A thorough due diligence will help to identify both the positives and negatives of the business about to be acquired, providing the information necessary for sound decision-making. However, there are many types of due diligence that can take place and while finance, operations and human resources are often considered, intellectual property (IP) is easily overlooked.
IP assets must be identified for a full understanding of a company’s portfolio. Are there existing patents or patent applications? What trademarks, copyrights and trade secrets does the company possess? Do they have any DBA’s or domain names? What about proprietary software or databases? Are there publicity rights or licensing issues?
Each of these questions, and more, must be answered to provide a complete picture of the company’s assets and their worth. The assets must be identified and their ownership established. Some may have filing or registration deadlines which must be met. Tackling these issues is the purpose of a dedicated IP due diligence. It can be a difficult process, because the issues surrounding IP assets are often complex. But a thorough IP due diligence can help to assure you that you’re making the most well-informed decisions possible.