This document provides an overview of intellectual property due diligence for an acquisition. It discusses timing considerations for IP due diligence and its purpose in assessing ownership, protection/liability issues, and freedom to operate. The document outlines factors that influence the scope of diligence, such as the type of investor and nature of the target's business. It also describes assessing ownership of IP assets, prior agreements, validity/strength of IP, and potential liability issues. The document concludes with discussing how to structure representations and warranties, disclosure schedules, post-closing covenants, and indemnification provisions to protect against liability.
The presentation below examines some of the following topics:
Why should biotech companies look to sell rather than go public?
How (and why) to build your deal team
Legal matters, insurance planning and tax planning
Indemnification privisions and the advantages of doing it early on
Financial statement considerations
Corporate books and other items you will need
How to position your biotech company for a sale
This presentation was prepared for the 2010 Australian Innovation festival by Mission HQ. It provides a framework that we utilise in consulting engagements for the valuation of technology based intellectual property.
Due Diligence - What You Don’t Find Out Will Hurt YouNow Dentons
This presentation focuses on the details of the due dilligence process. It covers the definition and role of due dilligence, provides a legal due diligence checklist and gives an overview of key due dilligence points and mining considerations.
The presentation below examines some of the following topics:
Why should biotech companies look to sell rather than go public?
How (and why) to build your deal team
Legal matters, insurance planning and tax planning
Indemnification privisions and the advantages of doing it early on
Financial statement considerations
Corporate books and other items you will need
How to position your biotech company for a sale
This presentation was prepared for the 2010 Australian Innovation festival by Mission HQ. It provides a framework that we utilise in consulting engagements for the valuation of technology based intellectual property.
Due Diligence - What You Don’t Find Out Will Hurt YouNow Dentons
This presentation focuses on the details of the due dilligence process. It covers the definition and role of due dilligence, provides a legal due diligence checklist and gives an overview of key due dilligence points and mining considerations.
Buying & Selling IP (Series: Intellectual Property 201)Financial Poise
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2021/
Due Diligence - Looking for Gold in the PaperNow Dentons
This presentation focuses on the details of the due dilligence process. It covers the definition and role of due dilligence, provides a legal due diligence checklist and gives an overview of key due dilligence points and mining considerations.
A summary of terms that should be included in licence agreements. Presented at an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 2, 2009.
An invention requires enormous time and money; above all, it requires patience. Inventing such ideas need to be protected. Continue to the presentation to know what you will get if you registered for a patent.
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This presentation gives an overall look at the due diligence process. It examines the key details of the process and why it is critical for any transactions as well as covers topics including: how a business deal guides the process, the transaction structure, and identifying risks.
NEWS FLASH: //Check our latest course offering on Patent-Business-Strategy over at Udemy here: http://www.udemy.com/patent-business-strategy/ with a 50 per cent launch discount //
An overview of IP/patent licensing field. Various strategies and practical aspects of patent licensing are discussed here. Please do NOT consider this legal advice.
[Some material has not been updated for recent changes, so use it at your own risk]
Disclaimer: This is not legal advice.
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Buying & Selling IP (Series: Intellectual Property 201)Financial Poise
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To view the accompanying webinar, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2021/
Due Diligence - Looking for Gold in the PaperNow Dentons
This presentation focuses on the details of the due dilligence process. It covers the definition and role of due dilligence, provides a legal due diligence checklist and gives an overview of key due dilligence points and mining considerations.
A summary of terms that should be included in licence agreements. Presented at an ASEAN-USPTO Program on Technology Transfer in Bangkok, Thailand, July 2, 2009.
An invention requires enormous time and money; above all, it requires patience. Inventing such ideas need to be protected. Continue to the presentation to know what you will get if you registered for a patent.
Intangible Assets under IAS 38 worry people more than it needs to. Here's a straightforward presentation which covers the essentials you should know when studying IAS 38 for work or exams.
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This presentation gives an overall look at the due diligence process. It examines the key details of the process and why it is critical for any transactions as well as covers topics including: how a business deal guides the process, the transaction structure, and identifying risks.
NEWS FLASH: //Check our latest course offering on Patent-Business-Strategy over at Udemy here: http://www.udemy.com/patent-business-strategy/ with a 50 per cent launch discount //
An overview of IP/patent licensing field. Various strategies and practical aspects of patent licensing are discussed here. Please do NOT consider this legal advice.
[Some material has not been updated for recent changes, so use it at your own risk]
Disclaimer: This is not legal advice.
Business Law & Order - January 21, 2012AnnArborSPARK
This is the sequel to SPARK’s popular IP–1 session in October 2012. In this installment, we will provide the keys to technology licensing and university technology transfer. Jeanne Moploney of Dykema Gossett PLLC will start by explaining the essentials entrepreneurs need to understand about technology licensing. Brian Copple from the UofM Tech Transfer Office will then talk about the many opportunities that exist for entrepreneurs to acquire cutting edge technology from universities, and how to work with university tech transfer offices.
A Step By Step Guide To Growing A Technology Business The Legal Aspects O...lisaabe
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The asset class of intangibles, including intellectual property (IP) makes specific demands on the due diligence process for transactions and strategic decision making.
Brian Tudor Discusses his Search Engine Marketing Strategy for Cincinnati Internet Marketing and Social Media Training company Boot Camp Digital http://bootcampdigital.com
8 Key Components of a Sucessful IP Due DiligenceSeth Northrop
Conducting an intellectual property due diligence is an essential component in the acquisition, investment in and/or valuation of technology companies.
What are some of the key components of the business should such a review include? In this presentation, Seth Northrop, an intellectual property lawyer outlines 8 key areas that matter when reviewing the IP of a company including review of employment agreements, IP assets, joint-development agreements, confidentiality provisions and more.
ANGEL CAPITAL SUMMIT PRESENTATION: Due Diligence: Your Offensive Line, Your Offensive Weapon.
This presentation takes the reader through the due diligence process at a high level and sets expectations around what angel investors should be analyzing and exploring when analyzing a potential angel investment. Specifically, it covers how long should an angel investor spend on due diligence, an efficient due diligence process to quickly weed out unattractive deals and what things are analyzed when performing deep due diligence.
Ryan Goral, Founder of Strategic Equity Partners, www.separtners-llc.com
IP rights are an important class of intangible assets that can be assigned or licensed to generate revenue. Indeed, some companies do not make or sell products; their entire revenue is derived from the licensing of their patents. Suffice it to say, licensing revenue has become a significant source of value in the global intellectual property economy. This webinar will help you better understand the complex legal issues associated with IP transactions.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/buying-selling-ip-2020/
Attorneys Agnes Juang, Arsen Kourinian and, Mauricio Uribe hosted a virtual discussion interactive webinar regarding strategic considerations for data privacy, security and IP due diligence
As a startup team, you create something—whether it’s software, a domain name, business logistics or a reputation—that falls within a class protected by the law. Some classes are protected automatically. Others require going through a registration, application or examination process. Fenwick lawyers Stephen Gillespie and Christopher Joslyn discuss what intellectual property is, why it is important and hot-button issues startups commonly face.
The Intersection of Bankruptcy and… Intellectual Property Law (1).pdfFinancial Poise
Intellectual property generally includes patent rights, copyright rights, trademark and service mark rights, and trade secrets. The foundation of intellectual property law is the protection of exclusive rights afforded to original works and invention. These rights can be significantly impacted by bankruptcy proceedings. This webinar examines some of these key issues including the perfection of security interests in intellectual property, the protection of certain intellectual property licenses and lack of protection for other types of intellectual property, the relief available to licensors, as well as special issues regarding assignment of licenses in bankruptcy proceedings.
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See more at https://www.financialpoise.com/webinars/
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Intellectual property generally includes patent rights, copyright rights, trademark and servicemark rights, and trade secrets. The foundation of intellectual property law is the protection of exclusive rights afforded to original works and invention. These rights can be significantly impacted by bankruptcy proceedings. This webinar examines some of these key issues including the perfection of security interests in intellectual property, the protection of certain intellectual property licenses and lack of protection for other types of intellectual property, the relief available to licensors, as well a special issues regarding assignment of licenses in bankruptcy proceedings.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/bankruptcy-and-ip-law-2020/
April 2011 - Business Law & Order - Mark G. MalvenAnnArborSPARK
This is the much anticipated sequel to SPARK’s smash hit IP–1 session last Fall. In this installment, we have assembled a star-studded cast of IP experts to discuss the ins and outs of licensing intellectual property (IP), as well as a “best practices” approach to avoiding the dreaded “cease & desist” letter from a competitor. Matt Bell from the UofM Tech Transfer Office will talk about the many opportunities that exist for entrepreneurs to acquire cutting edge technology from universities, and to engage university researchers to solve specific technical problems. Attorney Mark G. Malven will cover IP licensing for entrepreneurs. Attorney Richard (Rick) Hoffmann will share ways that startups and emerging businesses can reduce the risk of infringing third-party IP rights.
FLIGHT Amsterdam Presentation - Open Source, IP and Trade Secrets: An Impossi...Black Duck by Synopsys
At Flight Amsterdam, Fenna Douwenga, Associate, Bird & Bird provided practical tips on open source licenses, intellectual property rights, and trade secrets. During the presentation Fenna reviewed, everlasting conflict between patents, copyright and open source and how it can be overcome. Additionally, the new European Trade Secrets Directive was discussed and how some of the requirements therein may for instance conflict with the GNU General Public license. Furthermore, a quick outline of the influence of Brexit on licenses closed under UK law was given and how potential problems can be prevented.
Partners Melanie Seelig and Mauricio Uribe continued the two-part, comprehensive discussion on trade secrets. The presentation focused on a more detailed exploration of the topic and strategic implications for various scenarios .
Speakers: Melanie Seelig and Mauricio Uribe
Rob McInnes, one of Australia's leading patent and technology licensing lawyers gives an overview of IP basics and recent developments aimed at startups.
This was presented in a recent workshop for the INCUBATE startups.
Presented by James Longwell, Partner
The information in this presentation is for general information purposes only. It does not constitute a legal opinion or other professional advice.
Effective legal representation of innovators and inventors requires careful thought and consideration. Among other things, care must be taken to properly initiate communications, prepare assignments, and handle subsequent legal disputes. This webinar discusses common legal issues that often arise during the representation of innovators and inventors. It also includes valuable advice from both innovators/inventors and the IP attorneys who represent them.
Part of the webinar series: INTELLECTUAL PROPERTY 201 - 2022
See more at https://www.financialpoise.com/webinars/
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To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/legal-issues-for-innovators-inventors-2020/
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3. • If possible, Acquirer will want to do as much due diligence
as possible under an NDA before the parties sign a letter
of intent or definitive agreement.
• Generally due diligence should be completed before
definitive agreement is signed.
Diligence impacts and defines terms of definitive
agreement – including scope of reps & warranties.
Completion of “satisfactory” due diligence typically is
not a condition to the closing.
3
Intellectual Property Due Diligence
Timing
4. Intellectual Property Due Diligence
Purpose
• Ownership.
• Does Target own all of the rights to the technology it uses?
• Protection/Liability Issues.
• What IP protection has the Target secured, or will be able to
secure? How effective will that protection be in keeping
competitors away?
• Identification of risks that need to be minimized under
definitive agreements
• Freedom to Operate.
Can the Target commercialize its technology without infringing
third party IP rights?
4
5. Type of investor (e.g., strategic/financial) and stage of
Target will impact scope of diligence.
Increasing bank diligence on transactions.
Structure of transaction (asset purchase, merger, stock
purchase, new joint venture)
Nature of target’s business and products
The scope of due diligence also is influenced by the
Acquirer's objective(s) for the acquisition:
To acquire employees and know-how.
To acquire a critical piece of technology.
To eliminate a competitor.
5
Intellectual Property Due Diligence
Scope
6. Purpose #1 – Acquiring Employees/Know-How.
Have all employees signed employee invention
assignment and proprietary rights agreements?
Who are the key employees and what’s been done to get
them to stay (e.g., employment contracts, equity awards,
stock vesting)?
Are the key employees willing to continue to work for
Acquirer, and if not, can they be precluded from
competing against Target and from using Target’s
confidential information?
6
Intellectual Property Due Diligence
Scope
7. Purpose #2 -- Acquiring a Critical Piece of
Technology.
What IP protection is available for the technology, and
has Target taken appropriate steps to perfect its
intellectual property rights in the technology?
Does the technology infringe upon the intellectual
property rights of any third parties?
Acquirer may want to negotiate a license to the
technology so that Acquirer will have future access to
the technology even if the acquisition is not completed.
7
Intellectual Property Due Diligence
Scope
8. Intellectual Property Due Diligence
Scope
Purpose #3 – Elimination of a Competitor.
Are covenants not to compete enforceable in the
relevant jurisdiction? Even in some states where non-
competes are generally unenforceable, exceptions exist
for competitive restrictions agreed to in connection with
the sale of a business.
Colorado law permits noncompetition covenants in
certain circumstances.
Assignment issues
9. Patents.
• Request list of all patents (both U.S. and foreign) which are
issued and applied for, together with copies of the patents
and patent applications.
• Independent search of issued patents may be conducted
using online databases, including searching PTO files.
9
Intellectual Property Due Diligence
Identification of IP Assets
10. Trademarks/Servicemarks.
• Request list of all trademark registrations and pending
applications.
• Independent search of federal trademark registrations,
as well as most state and many foreign trademarks may
be conducted using online databases, including
searching PTO files.
• Request list of URLs if material to business.
10
Intellectual Property Due Diligence
Identification of IP Assets
11. Copyrights.
• Obtain list of all U.S copyright registrations.
Most foreign countries do not require registration of
copyrights.
Obtaining a list of all copyrighted works usually is
impractical and potentially burdensome.
• Independent search of copyright registration may be
conducted using online databases, including searching
Copyright Office files.
11
Intellectual Property Due Diligence
Identification of IP Assets
12. Trade Secrets.
Obtaining a list of all trade secrets usually is
impractical and potentially burdensome.
More important to investigate the practices and
procedures used by Target to protect its trade secrets.
Obtain relevant agreements (e.g., Non-analysis
agreements).
12
Intellectual Property Due Diligence
Identification of IP Assets
13. Title Issues.
• Have all relevant employees signed invention and proprietary rights
agreements?
• Who is the owner of record of all patents, copyright registrations,
trademark registrations?
Have all inventors and authors executed assignments?
Have all assignments in the chain of title been properly recorded?
Are there any joint owners?
In certain cases, review of PTO and Copyright Office records may be
necessary.
• Have any adverse claims of ownership been asserted?
13
Intellectual Property Due Diligence
Ownership of IP Assets
15. Independent Contractors.
• Have independent contractors contributed to development of
copyrighted works, including software or websites?
• Are contributions of contractors considered “works for hire”?
Signed agreements with non-employee contractors
stipulating that work is a “work-made-for-hire”?
Does work fall within one of the statutory categories that
qualify as a work-made-for-hire under 17 U.S.C. Section 101?
• Have contractors assigned copyrights or other intellectual
property rights to Target?
15
Intellectual Property Due Diligence
Ownership of IP Assets
17. Security Interests.
• Is Target’s intellectual property subject to any security
interests?
• Are there any IP escrow agreements in place?
• Have security interests been granted in agreements but
not perfected?
• Searches:
UCC searches
PTO and Copyright Office files
17
Intellectual Property Due Diligence
Ownership of IP Assets
18. Inbound Licenses.
• Review “license in” agreements for technology used by
Target in the ordinary course of its business, including
technology incorporated by Target into its products?
• Potential issues include:
Assignability/Change of Control
Right to grant sublicenses
Exclusive vs. non-exclusive
Restrictions on licensed field of use, territory, etc.
Royalty obligations
Term and termination
18
Intellectual Property Due Diligence
Prior Agreements
19. Outbound Licenses.
• Review “license out” agreement under which Target has licensed its
technology to third parties.
• Potential issues include:
Exclusive vs. non-exclusive
Scope of license
Compensation to Target (e.g., royalties)
“Most favored nations” clauses
If software, has source code been licensed or escrowed?
Scope of indemnity for IP infringement given by Target
Term and termination
19
Intellectual Property Due Diligence
Prior Agreements
20. Other Agreements.
• Review distribution, sales rep, value added reseller (VAR), original
equipment manufacturer (OEM), joint venture and other reseller
agreements.
• Potential issues include:
Exclusive vs. non-exclusive
Territory and restrictions on use
Minimum commitments
Compensation/Pricing
Assignability
Right to grant sublicenses
Term and termination
20
Intellectual Property Due Diligence
Prior Agreements
21. Patents.
• Is Target’s critical technology covered by patents or patent
applications?
• Are patents valid and enforceable?
Have all maintenance fees been paid?
When do patents expire?
Are there any blocking patents or known challenges to the patent’s
validity or enforceability?
• Review issues with Target’s patent counsel and outside experts
(if necessary).
• Not recommended for Acquirer to rely upon representations
and warranties instead of conducting due diligence.
21
Intellectual Property Due Diligence
Validity and Strength of IP
22. Trademarks/Servicemarks.
• Are key marks registered and in force in relevant
jurisdictions?
• Potential issues:
Have marks become “generic”?
Is Target using marks in same form and for same products as
registered?
Have marks been abandoned by Target through non-use?
Has Target taken action to monitor and enforce marks and to prevent
misuse by other?
Has Target licensed marks to third parties, and if so are there adequate
quality control provisions to avoid “naked” license?
22
Intellectual Property Due Diligence
Validity and Strength of IP
23. Trade Secrets.
• Uniform Trade Secrets Act (adopted by Colorado)
• Has Target implemented and followed practices and
procedures to protect its trade secrets?
• Internal security procedures.
• Disclosures to employees and outsiders.
• Has Target granted licenses to its trade secrets?
23
Intellectual Property Due Diligence
Validity and Strength of IP
24. Litigation and Infringement Claims.
• Target should identify all litigation brought by or
against Target during past 5 years (pending and
disposed of) as well as all outstanding or threatened
claims related to Target’s intellectual property.
• Has patent counsel provided opinion of non-
infringement/invalidity?
• Have any office actions or oppositions/interferences
been filed?
24
Intellectual Property Due Diligence
Potential Liability Issues
25. Intellectual Property Due Diligence
Protecting Against Liability
Representations and Warranties.
Specific IP Reps
Employee/Independent Contractor Reps
Undisclosed Liabilities Rep
Disclosure Schedules.
Acquirer/Target (and their counsel) pay particular attention
to certain disclosure schedules and underlying reps.
Post-Closing Covenants.
Indemnification Provisions.
Survival Periods/Caps/Baskets/Escrows.
26. 26
Intellectual Property Due Diligence
Biography
Brad Schoenfeld is a Partner in the Technology and Commercial
Transactions Group of Kendall, Koenig & Oelsner. Mr. Schoenfeld
began practicing law with Troutman Sanders in Atlanta, Georgia and
spent more than 6 years in-house with General Electric Company and
Siemens Corporation. He served as (i) general counsel for a $1 billion
division of GE Energy, (ii) lead sourcing counsel responsible for the
legal issues related to GE Energy’s $12 billion worth of purchasing
throughout the world, and (iii) lead attorney for more than 10 different
business units of Siemens Energy & Automation and Siemens Power
Transmission & Distribution. Today, Mr. Schoenfeld represents
software, medical device, biotech, professional services,
manufacturing and consumer product companies throughout the U.S.
Contact info: Kendall, Koenig & Oelsner PC, 999 Eighteenth Street, Suite
1825, Denver, CO 80202; Phone: 303.672.0100; Email:
bschoenfeld@kkofirm.com