In the context of buying or selling part or all of an individual or company's IP assets there are many things a smart business person must be aware of so that he doesn't end up empty handed without any IP rights. Just as with real estate purchases, a number of things should be investigated using due diligence (a higher standard of care). In the context of IP, due diligence requires more than compiling a list of IP assets.
Due diligence in the IP context should include an investigation directed toward identifying and assessing risks associated with a transaction and the consideration of what action, if any, should be taken to address such risk.
Why Should I Use Due Diligence When Conducting an Investigation?
Using due diligence will help you establish the proper value of assets prior to completion of the deal. Research gives you information concerning the management of IP by the owner of the targeted assets. It also provides the buyer with enough information to permit meaningful investigations to be completed on the targeted assets.
What Steps Should I take to be Diligent in My Investigation?
- Confirm the target company's rights in the IP (ownership, license, status)
- Confirming the validity and enforceability of the IP against third parties
- Identify technology (existing or under development) not currently protected by IP and assess the ability to obtain IP protection for such technology
- Identify IP owned by third parties that may block the target company's exploitation of its existing technology or technology under development
Should I Contact a Lawyer?
Each type of IP (e.g. patents, trademark, copyright, trade secrets) has it own pitfalls. A skilled intellectual property lawyer will help you successfully navigate what constitutes due diligence for each respective type of IP, and help you get the most out of your sale or purchase of you intellectual property.