IP  DUE DILIGENCE<br />© 2010  Vaish Associates Advocates. All rights reserved. <br />By<br />Intellectual Property & Info...
What is a Due Diligence?<br /><ul><li>A fact finding
“What are the facts”
An assessment
“What do I think of this”
A validation or corroboration
“Is this what I’m told it is”
“am I getting what I understand I should be getting”
Types of due diligence
IP ownership and rights due diligence
patent position due diligence (validity and infringement)
scientific / technical due diligence</li></ul>© 2010  Vaish Associates Advocates. All rights reserved. <br />
WHEN?<br /><ul><li>Acquisition
License agreement
Assignment of IP
Corporate merger
Financing
Takeover
Tax Benefits
Joint venture</li></ul>© 2010  Vaish Associates Advocates. All rights reserved. <br />
WHY?<br /><ul><li>To ascertain IPRs used in the business
What is the value
Hence level of risk
Who owns it
could I sue or could someone sue me?
Better exploitation of IP
licensing in or out of technology
Risk Minimisation </li></ul>© 2010  Vaish Associates Advocates. All rights reserved. <br />
WHO?<br />In case of all types of corporate ventures, both parties should undertake the due diligence.<br />In case of lic...
Purpose<br /><ul><li>Primary Purpose
Determine value of IP assets
Typically in terms of competitive </li></ul>	advantage <br /><ul><li>Secondary Purposes
Subject matter itself
Clear chain of title/Ownership
Scope of rights
Territory
Validity of rights
Infringement concerns addressed/Freedom to Operate</li></ul>© 2010  Vaish Associates Advocates. All rights reserved. <br />
Purpose<br /><ul><li>Assessment and Minimization of Risk
To ascertain that it can provide reps and warranties that Licensee will ask for
To ascertain who are the beneficiaries of the license, or who is the Licensee/user (scope of the enterprise)
Ensure third party contracts/licenses are being supervised and managed efficiently
IP Policies and Procedures
To ascertain Licensee’s ability to pay/exploit
To ensure technology is protected under foreign laws</li></ul>© 2010  Vaish Associates Advocates. All rights reserved. <br />
Valuation of Intellectual Property<br />IP Audits should be conducted to ascertain the value of IPRs which are used in eac...
Valuation of Intellectual Property<br />Legal entitlements<br />Other factors<br />Use a qualified valuator<br />© 2010  V...
Diligence and Valuation<br />Diligence information will assist in determining value of intellectual assets<br />Determine ...
Competitive Advantage (CA)<br /><ul><li>Product/Process Review
Existing
Pipeline
Value Propositions
What provides competitive advantage (CA)
Examine patents
CA covered by claims (pending and/or issued)
Ease of Design Around
What about design changes (drift)
Patent Searches/Analysis</li></ul>© 2010  Vaish Associates Advocates. All rights reserved. <br />
Due Diligence in M & A<br /><ul><li>Identify all I.P. of target
Confirm target’s rights in the I.P.
Confirm validity and enforceability of I.P. rights
Identify intellectual capital not formally protected
Identify relevant third-party I.P.
Take curative steps to minimize risk
The investigation of the assets and liabilities and the business undertaking</li></ul>© 2010  Vaish Associates Advocates. ...
Due Diligence in M & A<br />Why?<br />Determining the advisability of the transaction <br />Minimizing the risk of exposur...
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Ip Due Dilligence In India

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Due Diligence of Intellectual Property ( IP ) rights in India - Need and Recommendations

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Ip Due Dilligence In India

  1. 1. IP DUE DILIGENCE<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />By<br />Intellectual Property & Information Technology Laws DivisionVaish Associates AdvocatesIndia<br />Vijay Pal Dalmia, AdvocateHead Intellectual Property & Information Technology Laws Division<br />
  2. 2. What is a Due Diligence?<br /><ul><li>A fact finding
  3. 3. “What are the facts”
  4. 4. An assessment
  5. 5. “What do I think of this”
  6. 6. A validation or corroboration
  7. 7. “Is this what I’m told it is”
  8. 8. “am I getting what I understand I should be getting”
  9. 9. Types of due diligence
  10. 10. IP ownership and rights due diligence
  11. 11. patent position due diligence (validity and infringement)
  12. 12. scientific / technical due diligence</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  13. 13. WHEN?<br /><ul><li>Acquisition
  14. 14. License agreement
  15. 15. Assignment of IP
  16. 16. Corporate merger
  17. 17. Financing
  18. 18. Takeover
  19. 19. Tax Benefits
  20. 20. Joint venture</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  21. 21. WHY?<br /><ul><li>To ascertain IPRs used in the business
  22. 22. What is the value
  23. 23. Hence level of risk
  24. 24. Who owns it
  25. 25. could I sue or could someone sue me?
  26. 26. Better exploitation of IP
  27. 27. licensing in or out of technology
  28. 28. Risk Minimisation </li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  29. 29. WHO?<br />In case of all types of corporate ventures, both parties should undertake the due diligence.<br />In case of licensing agreement <br />Both licensor and licensee. <br />Licensor, to ascertain the licensee’s ability to pay the licensor or exploit the licensed IP <br />Licensee, to ensure that the licensor has the power to grant the license. <br />Similarly, In case of assignment agreements, both the assignor and the assignee should conduct the due diligence on each other.<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  30. 30. Purpose<br /><ul><li>Primary Purpose
  31. 31. Determine value of IP assets
  32. 32. Typically in terms of competitive </li></ul> advantage <br /><ul><li>Secondary Purposes
  33. 33. Subject matter itself
  34. 34. Clear chain of title/Ownership
  35. 35. Scope of rights
  36. 36. Territory
  37. 37. Validity of rights
  38. 38. Infringement concerns addressed/Freedom to Operate</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  39. 39. Purpose<br /><ul><li>Assessment and Minimization of Risk
  40. 40. To ascertain that it can provide reps and warranties that Licensee will ask for
  41. 41. To ascertain who are the beneficiaries of the license, or who is the Licensee/user (scope of the enterprise)
  42. 42. Ensure third party contracts/licenses are being supervised and managed efficiently
  43. 43. IP Policies and Procedures
  44. 44. To ascertain Licensee’s ability to pay/exploit
  45. 45. To ensure technology is protected under foreign laws</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  46. 46. Valuation of Intellectual Property<br />IP Audits should be conducted to ascertain the value of IPRs which are used in each department e.g.<br />Manufacturing- patents, designs,<br /> trade secrets<br />Research- patents, trade secrets<br />Marketing- trademarks, copyright<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  47. 47. Valuation of Intellectual Property<br />Legal entitlements<br />Other factors<br />Use a qualified valuator<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  48. 48. Diligence and Valuation<br />Diligence information will assist in determining value of intellectual assets<br />Determine value of intellectual assets in context of overall Target value<br />Forcing Target to resolve diligence issues increases value of intellectual assets<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  49. 49. Competitive Advantage (CA)<br /><ul><li>Product/Process Review
  50. 50. Existing
  51. 51. Pipeline
  52. 52. Value Propositions
  53. 53. What provides competitive advantage (CA)
  54. 54. Examine patents
  55. 55. CA covered by claims (pending and/or issued)
  56. 56. Ease of Design Around
  57. 57. What about design changes (drift)
  58. 58. Patent Searches/Analysis</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  59. 59. Due Diligence in M & A<br /><ul><li>Identify all I.P. of target
  60. 60. Confirm target’s rights in the I.P.
  61. 61. Confirm validity and enforceability of I.P. rights
  62. 62. Identify intellectual capital not formally protected
  63. 63. Identify relevant third-party I.P.
  64. 64. Take curative steps to minimize risk
  65. 65. The investigation of the assets and liabilities and the business undertaking</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  66. 66. Due Diligence in M & A<br />Why?<br />Determining the advisability of the transaction <br />Minimizing the risk of exposure for the target client <br />Formulating a proposal for the transaction<br />Structuring, negotiating and drafting representations and warranties that do not expose the client to risks and exposure identified during the process<br />Determining if closing conditions can/will be met<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  67. 67. THE ART OF CONDUCTING IP DUE DILIGENCE<br />The owner of IP will want to disclose as little as possible during the discussion stage, especially concerning important inventions.<br />The buyer of the IP will want to know as much as possible.<br />The owner can have a due diligence room where the buyer can go and inspect all relevant documents, but may forbid the buyer to make copies of the same.<br />This will help the buyer to ascertain the exact value of an IP. <br />Eventually the party (buyer or owner) who is in a stronger bargaining position will decide the amount of information to be given for the due diligence.<br />All information exchanged at this stage can be covered under a suitable confidentiality and non-disclosure agreement. <br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  68. 68. QUESTIONS TO BE CONSIDERED DURING IP DUE DILIGENCE<br />Nature of the IP in question, i.e., whether it is a patent, trademark, copyright or design.<br />How is the purported owner in possession of the IP, i.e., whether it has been assigned or licensed or whether it is being used in infringement of any third party rights. <br />Status of the IP in foreign jurisdictions. <br />Search of the relevant IP registries is a necessary step to be taken in this regard, but might be time consuming at least as far as foreign jurisdictions are concerned. <br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  69. 69. Factors<br />Cost and time of conducting the due diligence<br />Nature of the transaction<br />Nature and value of the intellectual property<br />Nature of the target’s business<br />Intended use of the intellectual property after the transaction<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  70. 70. STEPS IN DUE DILIGENCE<br />Identification of IP<br />Information Gathering<br />Analysis<br />Documenting the Transaction <br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  71. 71. IDENTIFICATION<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  72. 72. Understand the IP that Exists<br />Registered intellectual property<br />Unregistered intellectual property<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  73. 73. Registered Intellectual Property<br />Patents<br />Trademarks<br />Copyrights<br />Industrial designs<br />Domain names<br />Integrated circuit topographies<br />Plant breeders&apos; rights<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  74. 74. Unregistered Intellectual Property<br />Inventions<br />Trademarks<br />Copyright<br />Trade secrets<br />Goodwill<br />Moral rights<br />Personality rights<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  75. 75. INFORMATION GATHERING<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  76. 76. Information Gathering- What<br /><ul><li>Anything that could materially affect the value of the client or its IP position:
  77. 77. Examples:
  78. 78. Potential or actual litigations that could result in exposure
  79. 79. Agreements material to the company’s business that may be affected by change of control
  80. 80. Specifically
  81. 81. IP portfolio
  82. 82. Company policies and practices
  83. 83. Types of agreements
  84. 84. Provisions in agreements
  85. 85. Litigation/arbitration/mediation
  86. 86. Claims/threats of infringement</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  87. 87. Information Gathering- How<br /><ul><li>Checklist
  88. 88. Letter requesting documents
  89. 89. Data Room
  90. 90. Independent Investigations
  91. 91. PTO, Copyright Office
  92. 92. Interviews
  93. 93. Site Investigations</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  94. 94. Site Investigations<br />Intellectual property management practices<br />identification<br />protection<br />commercialization<br />Infringement mitigation practices<br />Identify intellectual property used by target<br />locate relevant documents<br />review of operations and products and services<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  95. 95. ANALYSIS<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  96. 96. Important Areas of Concern<br />Ownership<br />Licensing<br />Infringement <br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  97. 97. Ownership<br /><ul><li>Verify ownership
  98. 98. Assignment records
  99. 99. Recordation
  100. 100. Subsequent conveyances/contracts (not recorded?)
  101. 101. Chain of Title
  102. 102. Corporate name changes
  103. 103. Mergers
  104. 104. Holding Company v. Operating Companies
  105. 105. Search public archives and cross-reference
  106. 106. Unreleased security interests
  107. 107. Should be released?</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  108. 108. Ancillary to Ownership<br />Inventorship<br />Ensure comfort level with inventors named on patents<br />Government Rights<br />If government sponsored technology<br />If government market<br />Ensure proper notice and reporting to government if applicable<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  109. 109. IP Licenses<br /><ul><li>Review Target’s IP licenses
  110. 110. Exclusive v. non-exclusive
  111. 111. Field of Use restrictions
  112. 112. Who owns Improvements
  113. 113. Who enforces rights
  114. 114. Licensor necessary party
  115. 115. Term
  116. 116. Any unusual provisions
  117. 117. Make sure licenses are assignable
  118. 118. If silent and non-exclusive, default is not assignable
  119. 119. If “no assignment” clause
  120. 120. Consider stock deal (without dissolving target afterwards), or
  121. 121. Get permission
  122. 122. If not important to deal, don’t necessarily let it drive the form of the deal</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  123. 123. Infringement Concerns<br /><ul><li>More relevant for early stage Targets
  124. 124. Freedom To Use Opinions of Counsel
  125. 125. Reps/Warranties
  126. 126. Search Quality versus Project Budget
  127. 127. Can get very expensive
  128. 128. As with most things, the more thorough, the more expensive
  129. 129. File History Reviews
  130. 130. Opinions
  131. 131. Territory searched (U.S., Europe, Asia, etc…)
  132. 132. Consider design changes contemplated
  133. 133. How blocked in will you be?
  134. 134. Deal Breaker</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  135. 135. Patent Analysis<br />Identify all patent assets<br />Patents, pending applications, abandoned applications and patents, licenses<br />National and foreign<br />Current and previous companies<br />Owner /Assignor/ Assignee licensee / licensor<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  136. 136. Patent Analysis<br />Searches<br />patent number<br />owner<br />target<br />related companies<br />key employee or principal<br />inventors<br />interests recorded against title<br />provincial personal property registry<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  137. 137. Patent Analysis<br /><ul><li>Confirm Status of Patent Assets
  138. 138. Confirm term including extensions
  139. 139. Confirm payment of maintenance fees and annuities
  140. 140. Confirm status of applications (published, dates for action)
  141. 141. Claims analysis
  142. 142. scope of the claims
  143. 143. Validity analysis
  144. 144. Infringement analysis
  145. 145. Patentability analysis</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  146. 146. Patent Analysis<br />Confirm Nature of Rights<br />Review assignments / license agreements<br />Review ownership issues<br />Review employment agreements, joint development agreements, government contracts<br />Analyze conception records<br />Laboratory notebooks, R&D memos<br />Identify blocking patents (right to use v. exclude)<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  147. 147. Patent Analysis<br />Confirm Nature of Rights<br />Identify products (target and third-party) covered by patents<br />Confirm marking<br />Review prior art search and disclosure practice<br />Consider updated prior art search<br />Target’s assessment of rights / value<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  148. 148. Patent Analysis<br />Confirm Nature of Rights<br />Review offensive actions against third parties<br />Resolution<br />Estoppel issues<br />Reasonable royalty issues<br />Confidentiality<br />Term<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  149. 149. Patent Analysis<br />Analyze defensive trespass issues<br />Review all legal opinions (freedom to operate, non-infringement, invalidity)<br />Identify all past, present and future I.P. litigation<br />Review closed cases<br />Review pending cases<br />Review notice letters<br />Consider whether additional legal opinions are merited<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  150. 150. Trademark Analysis<br />Identify all Trademarks<br />Registered, Unregistered, pending applications, abandoned applications<br />National and foreign<br />Current and previous companies<br />Owner / Assignee/Assignor/licensee / licensor<br />Date of First Use<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  151. 151. Trademark Analysis<br />Searches<br />trademark<br />Owner<br />target<br />related company<br />predecessor company<br />interests recorded against title<br />provincial personal property registry<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  152. 152. Trademark Analysis<br />Geographical Extent<br />Infringement analysis<br />Registrability review<br />Validity analysis<br />Use review<br />different trademark<br />different wares and services<br />statutory use<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  153. 153. Trademark Analysis<br /><ul><li>Assignments in proper order
  154. 154. Renewals timely filed
  155. 155. Opposition/cancellation proceedings
  156. 156. Classes
  157. 157. Third party use
  158. 158. Policing/Licensing
  159. 159. Protests
  160. 160. No encumbrances/liens</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  161. 161. Copyright Analysis<br />Searches<br />title<br />owner<br />security interest<br />author<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  162. 162. Copyright Analysis<br />Identify all Copyrights<br />Registered and pending applications, <br />Not Registered<br />Commissioned<br />Owner / Assignee/Assignor/licensee / licensor<br />Date of First Publication<br />Term<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  163. 163. Copyright Analysis<br /><ul><li>Ownership
  164. 164. Scope of Rights (exclusive, non-exclusive)
  165. 165. Registrations in Proper Order
  166. 166. Rights Transferable
  167. 167. Assignments in proper order
  168. 168. Licensing
  169. 169. Moral rights
  170. 170. Grants Effective
  171. 171. No encumbrances/liens</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  172. 172. Industrial Designs Analysis<br />Identify all Industrial Designs<br />Registered, pending applications, abandoned applications and licenses<br />National and foreign<br />Current and previous companies<br />Owner /Assignor/ Assignee licensee / licensor<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  173. 173. Industrial Designs Analysis<br /><ul><li>Confirm Status of Industrial Design
  174. 174. Confirm term including extensions
  175. 175. Confirm payment of maintenance fees and annuities
  176. 176. Confirm status of applications (published, dates for action)
  177. 177. Claims analysis
  178. 178. scope of the claims
  179. 179. Validity analysis
  180. 180. Infringement analysis</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  181. 181. Domain Names Analysis<br /><ul><li>Review registration records
  182. 182. Verification of record owners
  183. 183. Service agreement
  184. 184. Assignments in proper order
  185. 185. Status of registration and renewal
  186. 186. Domain names which contain a significant trademark
  187. 187. are they registered
  188. 188. who owns them</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  189. 189. Trade Secret Analysis<br /><ul><li>Analyze substantive trade secrets
  190. 190. Analyze ownership/development issues
  191. 191. Analyze confidentiality practices
  192. 192. Employment agreements
  193. 193. Non-disclosure agreements
  194. 194. Use of “Confidential” markings
  195. 195. Notice to employees of confidential nature
  196. 196. Practices for dissemination of information
  197. 197. Security precautions</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  198. 198. Litigation Analysis<br /><ul><li>Review copies of all cease and desist or demand letters
  199. 199. Assess risks, exposure of actual and threatened litigation:</li></ul>Indemnification (both ways)<br />Worst case scenario if client is defendant: Effect on business<br />Likelihood of success<br /><ul><li>Review all settlement agreements concerning IP
  200. 200. The claim not brought by the client may be as important as the one brought by or against the client</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  201. 201. DOCUMENTING THE TRANSACTION<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  202. 202. DOCUMENTING THE TRANSACTION DRAFTING TIPS<br />Relevant Sections of Purchase Agreement:<br />Definitions<br />Assets<br />Intellectual Property<br />Scope of Transfer<br />Representations and Warranties<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  203. 203. DOCUMENTING THE TRANSACTION DRAFTING TIPS<br />Some typical representations and warranties:<br />Here are some lists of all the IP seller owns, has licensed from someone else and has licensed to someone else (see disclosure schedule)<br />Seller hasn’t given any IP or rights away unless it’s disclosed<br />Seller owns or has acquired sufficient rights to exploit the works in the way it is doing so currently<br />Good and marketable title<br />No liens or judgments<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  204. 204. DOCUMENTING THE TRANSACTIONDRAFTING TIPS<br />More Reps and Warranties:<br />All registrations and applications to government entities with respect to IP are valid and in full force and effect and all registration and renewal fees due up to closing are paid.<br />Right to use computer systems and software<br />No pending, threatened claims against seller unless disclosed<br />Seller not violating any third party rights unless disclosed<br />Third party not violating any Seller’s rights unless disclosed<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  205. 205. DOCUMENTING THE TRANSACTIONDRAFTING TIPS<br />Yet MORE typical reps and warranties:<br />Domain names and trademarks are still in full force and effect as of closing and no pending or threatened challenge to domain names, opposition, cancellation, etc. as to trademarks<br />Assignability of contracts, rights thereunder<br />Owns rights to customer information, supplier information or other lists included in the IP assets being sold<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  206. 206. DOCUMENTING THE TRANSACTION DRAFTING TIPS<br />Qualifying reps and warranties:<br />As to time period<br />As to materiality<br />As to seller’s business<br />As to particular agreements’ effect on the seller’s business “taken as a whole”, or “Individually”<br />Disclose, disclose, disclose!<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  207. 207. DOCUMENTING THE TRANSACTION DISCLOSURE SCHEDULES<br />You have discovered that a number of the contracts you’ve reviewed, in particular the software development agreements and licenses, contain a requirement that your client obtain a consent to their assignment to a third party.<br />How do you recommend that the agreement deal with this?<br />Disclosure schedules<br />Itemize all the contracts<br />Seller will exercise “reasonable best efforts” to obtain consents<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  208. 208. Legal Due Diligence - Encumbrances<br /><ul><li>Is there anything that detracts from the ability to make deals freely with this IP?
  209. 209. Is there a security interest granted over the IP ?
  210. 210. Mortgage
  211. 211. Charge
  212. 212. Is there a joint owner ?
  213. 213. Patents: one owner cannot assign without the consent of the other (except US)
  214. 214. Copyright: all copyright holders must act jointly, neither can act alone
  215. 215. Does someone have an option over the IP
  216. 216. Does someone have a right of first refusal
  217. 217. Is there an obligation to manufacture in a particular country or state ?
  218. 218. Does the owner have an obligation of confidentiality</li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  219. 219. Defective Due Diligence<br />Possible adverse impact:<br />Discovery of a joint owner that has inflated commercial expectations and puts your capital raising or deal at risk<br />Non-Renewal of trademark<br />Delays in capital raising or deal<br />Financial terms renegotiated by assignee / investor / licensee given the risks of discovered and previously undisclosed defects<br />Know-how not transferred<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  220. 220. EXAMPLE<br /><ul><li>In 1998 when Volkswagen was negotiating to acquire the automotive operations of Rolls Royce. VW paid £479 million for these operations, only to find that it had acquired no rights in the valuable Rolls Royce trademark. The mark went to BMW, which had separately negotiated to acquire the trademark rights. </li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  221. 221. Advantages of Due diligence<br />Economic life of property <br />Lifecycle of technology<br />Nature of property - how is it used<br />Legal protection of property <br />Tax benefits<br />Forecast of revenue and operating profits attributable to property<br />Level of research and development needed to maintain property<br />Cost of developing competing property<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  222. 222. Advantages of Due diligence<br /><ul><li>Any restrictions on exploitation
  223. 223. Logical extension of property for other uses
  224. 224. Extent of brand loyalty
  225. 225. Extent of investment needed for property to become commercially viable
  226. 226. Analysis of key people associated with property
  227. 227. Extent of functional and/or technological obsolescence (e.g. software to hardware)
  228. 228. Transferability of property
  229. 229. Dependency on raw materials used by the property </li></ul>© 2010 Vaish Associates Advocates. All rights reserved. <br />
  230. 230. Duties of an active IP Owner <br />IP Owner should undertake its own due <br /> diligence as part of preparing IP <br /> for a capital raising or deal<br />Discover its own defects<br />Plug them up first<br />Prepare<br />IP & Contracts Map<br />Identifies every inventor<br />Identifies every link in the chain of ownership and rights<br />Employee to Employer<br />Assignment or license from collaborator<br />Assignment from student<br />Ownership provisions in an MTA<br />Assignment from a contractor<br />Demonstrates that the IP Owner has the ownership (or rights) to deal with the IP in the deal proposed<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  231. 231. WORLD’S 10 MOST VALUABLE BRANDS<br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  232. 232. WORLD’S 10 MOST VALUABLE BRANDS<br />As per survey conducted by Millward Brown Optimor <br />© 2010 Vaish Associates Advocates. All rights reserved. <br />
  233. 233. Vijay Pal Dalmia, AdvocateHead Intellectual Property & Information Technology Laws Division<br />Intellectual Property & Information Technology Laws Division<br />Flat No 903, Indra Prakash, 21, Barakhamba  Road,New Delhi 110001 (India)Phone: +91 11 42492532 (Direct)Phone: +91 11 42492525 Ext 532Mobile :- 9810081079Fax: +91 11 23320484email:- vpdalmia@vaishlaw.com<br />

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