The First Pass Checklist is essentially a tickle list to make sure that all high-level areas are covered during an IP due diligence process. For a much more complete guideline of the elements that should be put into a due diligence process, the below, more complete checklist is provided. It has been used [...]
For ease of use, two “check-lists” are now provided. The following is a First Pass at an IP due diligence outline. The purpose of the First Pass is to identify the key areas and topics for performing IP due diligence. The summarized elements are: I. General Company Information: Market information; product information; geographic [...]
Step 10. Establish a Value. Establishing a value for intellectual assets is a difficult task and will be covered in more detail later in this chapter. A pioneering patent with broad, valid claims in a thriving industry which can be used to effectively block all competitors is significantly more valuable than a patent [...]
Step 9. Review Other Considerations. An intellectual asset acquirer may wish to review the composition and character of the relevant industry. An acquirer takes significant risks entering a particularly litigious field in which at least one competitor is particularly litigious or notorious for infringing the rights of others. An acquirer should also consider [...]
Step 8. Identify Warranties and Indemnities. Acquirers seek indemnification for infringement of intellectual assets in the hands of third parties. Contributors seek to limit financial exposure and to avoid the liability for the acquirer’s actions that the contributor cannot control. To the extent that the contributor warrants non-infringement of another’s intellectual assets as [...]
Step 7. Conducting a Non-Infringement Investigation. Acquirers undertake non-infringement investigations to avoid exposure to unexpected expense resulting from infringing intellectual property that belongs to others. Trade Secrets. Acquirer should require the contributor to document that trade secret information developed by the firm or its employees is not an infringement of another’s trade secret. [...]
Step 6. Verifying That Intellectual Assets Can Be Exploited. The value of intellectual property assets lies in the future entity’s ability to exploit the assets in the marketplace. There for the future entity must be assured that they have proper ownership of the asset, that it is valid and enforceable, is not the [...]
Step 5. Determine the Existing Scope of Intellectual Asset Protection. To complete this step the future entity’s management team must examine the scope of technical know-how, trade secrets, patents, copyrights, trademarks, and existing licenses. Each assessment requires expert opinion and is described in very general terms below: Technical know-how. The scope of [...]
Step 4. Industry Analysis. The future entities’ management team should be acutely aware of industry competitors and their intellectual property portfolios. Little can be done to evaluate trade secrets of potential competitors. However, searching assignment records at national patent and trademark offices can help identify whether potential competitor has an extensive patent [...]
Step 3. Prioritize Analysis Results Relative to the Future Entities Business Plans. Depending on the size of the transaction, the amount of intellectual property may require the future entity’s management team to focus on only certain product lines or other high-priority items. When the future entity’s management team seeks to continue deriving income [...]
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