Intellectual property due diligence

A key part of attracting investors’ attention is the evaluating of the enterprise’s IP assets. On the opposite, many problems can occur when one does not know what to expect in terms of a company’s IP potential. This article’s goal is to explain what it is exactly that investors pay attention to while performing due diligence (DD) of intellectual property objects.

For venture capitalists

While preparing a detailed overview of IP objects, it can be useful to hire a team of specialists that have expertise in the technological, commercial, and legal aspects of IP assessment. However, for those who have their own IP professional, it is crucial to communicate with them closely during the assessment process. It is mainly important to inform the experts about:

• what types of patents and to which extent need to be assessed. Do not forget that patent assessment is technically the most expensive part of exercising DD of IP;
• how detailly you need them to assess unregistered IP assets;
• what kind of business was an investee’s activity and what you are planning to do after investment or acquisition (keep in mind that no sensitive data can be disclosed);
• instructions on how the report must be presented.

For investment purposes

The main advantage of having an IP specialist working with the legal DD process is that they can provide competent assistance. Therefore, it is recommended to proceed with the following:

• deliver the explanation of the way a company handled its IP assets;
• find IP professionals who would do a preliminary assessment of IP assets before undergoing a full DD process;
• describe previous experiences involving undertaking risks connected to IP assets by a company;
• in case a patent specialist created your IP asset portfolio, invite an IT expert who would perform a deep analysis of a company’s IP assets but not focus extensively on patents.

IP owners should definitely perform IP auditing on their assets. Specialists from COREDO can do it for you. Contact us for receiving assistance with IP objects registration and an individual consultation regarding other aspects of IP ownership.