Jane Edwards
Keegan Caldwell, founder and global managing partner at law firm Caldwell, said companies engaging in mergers and acquisitions, strategic partnerships, joint ventures and other transactions should consider intellectual property due diligence as a strategic imperative.
“Companies that approach IP due diligence systematically, engage specialized expertise early, and maintain robust documentation will be better positioned to navigate complex transactions and emerge successfully,” Caldwell wrote in an article published Thursday on the law firm’s website.
IP Due Diligence Could Help Determine Company’s Future Market Position
According to Caldwell, rigorous IP diligence requires companies to conduct a comprehensive analysis of licensing agreements, ownership chains and potential infringement risks across multiple jurisdictions.
“Without a detailed and multifaceted approach, companies risk failing to discover IP complications ranging from gaps in patent coverage to undisclosed third-party rights that could impact commercialization plans,” he wrote.
For transactions that involve artificial intelligence and other advanced technologies, Caldwell said companies should understand the need to conduct thorough IP due diligence to determine existing IP rights, pending patent applications and potential future claims that could affect market access and product development.
Assembling the Team for IP Due Diligence
Organizations engaging in M&As and other corporate transactions should establish a team to conduct thorough IP due diligence. The team should be composed of legal counsel specializing in IP law, financial analysts who can help quantify findings and technical experts who understand the innovations.
“Essential components of effective IP due diligence include a thorough ownership analysis, assessment of IP validity and enforceability and evaluation of potential infringement risks,” Caldwell stated.
IP Due Diligence Checklist
When conducting IP due diligence, Caldwell noted that companies should have a checklist that covers a review of IP-related litigation history; patent and trademark searches across relevant jurisdictions; evaluation of trade secret protection measures; analysis of licensing agreements and technology transfer contracts; and examination of research and development documentation.
“Regardless, for optimal results, companies should begin IP due diligence early in the transaction process—ideally before signing letters of intent. Ultimately, this proactive positioning allows for a thorough investigation and can even provide leverage in negotiations,” he added.
