DD of Intellectual Property

A careful assessment of an enterprise's IP assets is an important part of a strategy aimed at attracting investors. Conversely, not knowing what to look out for in relation to IP has the potential of creating many problems. So, let's take a closer look at what potential investors will have to keep in mind when it comes to DD of IP objects.

For Venture Capitalists

In cases requiring an indepth review of IP objects, an expert team specializing in assessment of IP from the technological, legal & commercial standpoints must be hired. Should you already have your own IP expert, you must insist on their close interaction or keeping in touch with them. Also, you should make sure that you:

• inform the team of the extent to which patents & their types must be assessed (please, keep in mind that patent assessment is arguably the most costly part of performing DD of IP);
• inform the team of the extent to which you want them to assess unregistered IP assets.
• inform the team of an investee's business, as well as your plans regarding a period of time after investment & acquisition (be sure not to disclose any sensitive data).
• discuss the team’s report, including the way it needs to be presented.

For Investment Purposes

Experienced IP specialista can provide competent assistance with the legal DD process. Here’s what we suggest you do:

• have IP professionals do a preliminary assessment of intellectual assets prior to undertaking a full-scale DD process.
• come up with reasons for the way a company has handled its IP assets.
• come up with plausible answers to whatever risks a company can encounter with regard to its IP assets.
• if patent specialists were involved in the creation of your portfolio of IP assets, have a qualified IT professional do an indepth analysis of a company’s IP assets without focusing too much on its patents.