IP Due Diligence Services – M&A Transactions

As anyone knowledgeable in IP will tell you ‘Counting does not count’ and when it comes to IP rights it is the quality that counts more than the quantity! Without good due diligence, it would be possible to buy a major product without knowing it was infringing another’s IP rights.

Patent litigation especially lies in wait for a capital injection or IPO in a business and then jumps out to attack when the coffers are full.

M&A IP due diligence has had a spotty history with many being satisfied with a simple count of IP rights and a standard set of reps and warranties to cover any risks.

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There are many issues with this approach as VW may (not) tell you:

When VW bought Rolls Royce (cars) no one realised that all the trademarks were held by Rolls Royce aerospace which was outside of the acquisition.

As a result, VW ended up with ‘egg on its collective face’ because whilst it had acquired the manufacturing capability it did not have the rights to sell cars under the Rolls Royce trademark!

1. Ownership checks. In many other areas of business, ownership of assets is very clear, however, IP rights are not the same as other asset classes and it is estimated that as many as 20% of all patents have an incorrect chain of title.

It is similar to trademarks and other IP assets so checking the title to IP records is a must with acquisitions. Similarly, ensure the owner has the right to transfer the assets in question.

2. Freedom to Operate. Sometimes M&A activity triggers litigation because it suddenly becomes financially more interesting for the other party as the likely damages increase.

Checking freedom to operate for major products is a good idea, that is understanding the likelihood that you might be infringing others' IP with your products in the marketplace.

The other side of this assessment is to understand whether any of the IP rights have been involved in any form of litigation defensive or offensive.

Your company’s future with us, guaranteed success.

3. Competitive landscape review. Understanding the IP competitive landscape can identify businesses who may not be immediately obvious as competitors, for example smaller fast growth businesses and new entrants. IP registration activity can be an early sign of intended product launches or business transactions.

 

4. Trademark assessment. It is essential to check the brands to see what protection is in place from registered and unregistered trademark rights, whether these rights are enforced and whether there is good evidence of use and goodwill to support trademarks in each jurisdiction.

 

5. Assessment of online brand assets through domain names (ownership, management, status); websites and comprehensive, active coverage of all social media platforms.

 

6. A review of online infringement and counterfeit activity to understand any risks likely to damage sales and reputation.

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7. Trade secrets review. Review of trade secrets and know-how programmes and systems in place. Review of any likely exposure to trade secret theft or infringement (both ways).

 

8. Copyright. Ensure optimal use of Copyright protection throughout the business.

 

9. Licenses review. Review and understand any licenses and liens on the IP and implications post-completion.

 

10. Agreements review. Contracts review with a focus on protection for IP, term length, with employees and with suppliers, customers, and partnerships.

 

11. Open source risks. Assessment of the use of open-source software and the risks associated with unknown licenses and security back doors.

 

12. Data risks. Ensure all data is protected using IP rights, and technology and meets regulatory guidelines.

Clients Love

Neil Court Johnson

John has played an invaluable role in assisting us to develop and implement a trade secrets programme, to identify and roll out IP best practice in process and systems - and has provided us with critical support regarding IP in real life business negotiations. I would strongly recommend John as a business partner.

Christine Jennings

I have worked with John for many years within the IP industry. He has an impressive ability to identify opportunities and turn these into commercial business deliverables.

Katie Gordon

I was very confused about what unregistered trademark and registered trademarks were, IP protection and simply how to protect my business and IP assets.

Brian Mwenda

“It is always a delight working with John. He has been an invaluable resource to our business as we build our intellectual property asset base. We have successfully received registration for trademarks and patents while following an IP strategy developed by John.

Harry Dunlop

“I was fortunate enough to work with John relatively early-on in my career and look back on that time extremely fondly. John is an exceptional and instinctive mentor and coach who always brings a wealth of business and IP experience to any situation with understanding and compassion.

Simon Webster

I thoroughly enjoyed working with John. We built two new products together, worked on challenging market and customer opportunities and had a great deal of fun along the way.

Colin Hunter

I have known John for many years and I value his logic, his structured thinking and his ability to make complex simple especially, not not only, in IP. Would recommend him highly as a strategic and thinking partner.

Christian Bunke

Exalt IP coached us on how to achieve amazing value for our IP assets when we sold the business and the IP separately

CEO MyDrive

“Exalt IP helped us develop an IP Strategy Business Plan, identify and protect the value in our IP and to enhance the value of our business” CEO MyDrive