IP due diligence and IP risk assessment for investors
Intellectual property (IP) due diligence should be a non-negotiable for investors. Before you make a final decision as to whether you will invest in a business, you should have a complete picture of both the business’ true long-term value and the potential risks it faces.
Conducting a thorough analysis of a target company’s IP unlocks a range of commercially critical information.
You will be able to accurately assess the value of the business’ key assets.
You will help minimise, and understand, the risk of legal disputes by confirming the ownership of and potential challenges to the IP they claim to own.
You will also gain a better understanding of the monopoly rights of the business which can provide a competitive advantage, impact on its revenue potential and, ultimately, its potential value at exit.
Unfortunately however, IP due diligence can quickly become overly detailed and expensive. More frustratingly, the results sometimes provide little more than a long list of IP rights that offer no indication as to the contribution these rights make to the business.
What you actually need is a much more commercial and technically and legally informed assessment of the IP involved.
You need confirmation the company you are planning to invest in has both the IP rights and the IP strategy in place to drive its business plan through to a financially successful exit, as well as advance warning of any red flags that could impact the success of your investment.
WHY SHOULD INVESTORS ASK POTTER CLARKSON TO DELIVER THEIR IP DUE DILIGENCE AND IP RISK ASSESSMENT?
The main reason is having worked with investors for decades, we understand exactly what you need from us.
We have combined what we have learned to create VerifyiP, a proven model we have developed over the last 20 years whilst working closely on IP due diligence assignments with investors in the UK, Scandinavia and Germany as well as financial institutions, law firms and other specialist professionals.
During the VerifyiP process we will independently examine:
- The company’s business plan from an IP perspective (including, where relevant, their technology roadmap).
- Whether the IP strategy they have in place is appropriate or whether a more structured IP strategy should be created.
- Whether the IP they have covers the company’s products and services, or alternative rights need to be applied for.
- The licences, agreements, and other commercial contracts the business has entered into so we can confirm the impact of these on the IP they own and use.
- The legal ownership of their IP.
- The way they manage their IP (is it a Board level consideration or is it managed at a lower level?).
- The way they work with third parties and the impact these agreements could have on their future and their future IP strategy moving forward (again including confirmation that the required agreements are in place to define/support these relationships).
- Their attitude towards IP-related risks, including – most critically - their approach to freedom to operate (FTO).
And once we have all the answers, we will present them in a concise report that explains how their IP is relevant to their business plan and sets out how their key products and processes are protected to give you the extra independent verification you’ll need to make fully informed investment decisions.
If you would like to find out more about our approach to IP due diligence and discuss how we can add value to your decision-making process, please contact us today.
