IP Due Diligence — M&A & Investment

IP due diligence is the examination of a target's intellectual property in an M&A or investment transaction — the patents, the trademarks, the copyrights, the designs and the trade secrets, tested for their ownership, their validity, their protection and their enforceability under the Patents Act 1970, the Trade Marks Act 1999, the Copyright Act 1957 and the Designs Act 2000. The diligence answers the questions the deal depends on: does the target own the IP it claims, is the IP actually registered and maintained, are the employees' and the consultants' IP assigned to the company, and is the IP the target's competitors are not free to use?

In a technology or a brand-led deal, the IP is the asset the buyer is actually paying for. The diligence tests whether that asset exists and whether it can be enforced — and the gaps it finds are the price adjustments, the warranties and the indemnities of the transaction. A target whose key patent is co-owned with a third party, or whose brand is registered in the founder's name, is a target whose acquisition needs restructuring before it closes.

The cost of the skipped IP diligence is the acquisition of a claim that does not hold: the patent that is invalid, the trademark that is opposed, the code whose ownership was never assigned — each an asset the buyer paid for and cannot use, and each a dispute that surfaces after the deal, when the price can no longer be negotiated.

This service is for acquirers, investors and the targets themselves. We inventory the IP, verify the ownership and the registration status under the IP statutes, test the assignment and the chain of title — the employees, the consultants, the contractors — assess the validity and the enforceability, and report the IP position with the risks and the deal terms they should drive.