IP due diligence analyses

Due diligence is a meticulous analysis undertaken to establish the financial, commercial and legal aspects of a firm’s intellectual property, typically before it is bought. Consequently, the IP due diligence analysis often serves as a basis for evaluating the value of the company and as key information for the buying party when discussing the financial and commercial terms of an agreement.

The intellectual property part of a due diligence analysis typically deals with some major issues:

• can the firm operate freely within the business area in question
• does the firm have the relevant IP within the entire or part of the business area
• is the pending application as strong as claimed by the seller
• is the IP valid, i.e. can the applications or the issued rights be upheld and enforced

An IP due diligence is relevant in connection with mergers and acquisitions, but also in connection with generational change in a company. Often we are asked to undertake IP due diligence analyses in situations where a client:

• is about to invest in new areas of business
• wants annual analyses in order to manage his or her patent portfolio in a financially profitable way.