There are many different types of business questions or issues in respect of which we can help clients from a due diligence perspective. Due diligence activities can include searches to verify ownership or chain of title, freedom to operate, validity of various IP rights, or many other questions which might contribute to valuation of IP. Another consulting service we can provide is to advise clients in grooming or preparing their IP portfolio to undergo a due diligence or a particular type of transaction.
One of the key areas in which companies sometimes desire to conduct due diligence activities is to conduct searches or obtain strategic advice around the scope , breadth or validity of the intellectual property rights of competitors. Competitive IP intelligence is used in many ways, from assessing the strength of a competitor’s IP position in a particular technology or even perhaps valuing the IP aspect of a takeover transaction of a competitor, through to perhaps even just conducting a watch of competitive IP activity to understand what is going on in the industry or industries of interest to you.
CHAIN OF TITLE
Some of the key factors that would contribute to the valuation in a transaction which had an intellectual property component may include the following: competitive landscape, industry developments involving the companies implicated by a transaction, strengths or possibility of third party claims to the intellectual property in question, etc.. Are there for example third parties that have any intellectual property rights that would interfere with the client or the targets use of their IP? Is the intellectual property adequately protected? These are some of the business level questions or concerns can be addressed with some searching and background research in this area.
Dependent upon the nature of the transaction, the parties may also want to look at litigation or risk profile issues. In terms of due diligence, it may also be worthwhile to consider whether there threats of IP infringement by third parties which would lead to a need to do any background research to assess the validity or strength of such a claim or whether it may be necessary to consider if the target’s IP may infringe third party rights (infringement opinions) or may be of lesser value than initially suggested in the context of negotiations (i.e. based on IP validity opinions), etc.
Interested in IP valuation and due diligence for your business? We can help.