Due Dilligence
If you are involved in an acquisition, divestiture of assets, or merger it is important
that both buyers and sellers give appropriate attention to the intellectual property
(IP) assets involved in the transaction. Intellectual property is no longer a side
issue but is oftentimes the key component for consummation of acquiring a business.
For a buyer, disclosures in the IP due diligence process can provide important renegotiation
points. For example, if patents or trademarks are key assets in a technology company
who has not acted to adequately protect them, the price of that company may well
be overvalued. Or, if the company being acquired has a high profile trademark but
it is found that they have not acted to ward off others using that same mark, this
might be a reason for renegotiating or even preventing consummation of a deal.
For the seller, reviewing all of their intellectual property information can help
them to make proper representations and warranties as to their liabilities. Further,
a good IP due diligence may reveal weaknesses in their intellectual property portfolio.
By acting on this information to upgrade their portfolio, a company can better position
themselves to take advantage of their market and appear more attractive to investors
or purchasers.
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