past, present, or potential claims, litigation, or proceedings involving the IP. No transaction seeks to acquire or license a liability. Support the due diligence review with appropriate representations or warranties to back the claims of a seller or licensor. Consider a similar approach to reviewing and auditing one’s own inhouse IP assets. Failure to promptly identify, assess, and mitigate specific issues during diligence can undermine the initial rationale for valuation of the transaction. What is an M&A due diligence checklist, and what are the critical IP areas of inquiry? IP due diligence can range from a bare minimum of review to comprehensive reviews of the associated business operations, processes, and personnel. The main goal in each situation is to ensure ownership or claimable rights and avoid credible third-party IP claims. But regardless of the nature of the transaction, effective IP due diligence generally includes the following: • Identify and inventory all of the rights exist or are claimable. Start the due diligence review immediately and always in furtherance of the goals of the transaction. Context matters. The type and purpose of the transaction, the amount of investment or compensation, the perceived importance of the IP, the goals of the purchaser or licensor conducting the review, and the nature and commercial value of the associated business or assets are key considerations. Review related and relevant documentation supporting ownership, rights, or assertions. Review related development or creative processes and associated documentation evidencing innovation and originality. Interview appropriate individuals involved in the creative or development process. Identify, audit, and report all relevant IP rights. Assess the third-party landscape to determine technology and intangible assets, whether registered or merely claimed • Review the scope and existence of related IP rights claimed, held, or owned in connection with such assets • Assess the legal right, validity, and status of the associated IP rights • Review the related exploitation of the rights under the IP through the examination of related contracts involving the licensing, acquisition, or disposition of the associated IP rights • Review any associated legal claims, proceedings, or settlements involving the IP (or associated business) in all applicable jurisdictions where creation or development occurred, related business was operated or undertaken, and future business may be operated or undertaken. As a part of this exercise, scrutinize whether any of the target IP is subject to threatened third-party infringement claims and develop a risk assessment for continued use of the IP (or technology) or operation of the associated business • Consult with a financial professional regarding the related financial value of the claimable IP assets WWW.LAWYER-MONTHLY.COM 81 The main goal in each situation is to ensure ownership or claimable rights and avoid credible third-party IP claims. About Armand I work at the intersection of commerce and technology, focusing my practice on the exploitation of intellectual property, intangible, and technology assets in business and strategic relationships. I co-chair Venable’s nationally recognized Intellectual Property (IP) Transactions team, which handles some of the most complex deals around the world. For three decades, our IP Transactions group has counseled well-known Fortune 500 companies, nonprofit and trade organizations, start-ups, and everyone in between on various IP and technology transactions.
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