The Importance of Intellectual Property Due Diligence in Mergers and Acquisitions

Having a comprehensive intellectual property (IP) due diligence review prior to a merger or an acquisition is incredibly important, because IP can affect the seller’s business model and the acquisition decision of the buyer.

Companies that ignore the importance of IP due diligence usually experience serious to severe consequences as a result of the negligence.

The Volkswagen purchase of Rolls Royce is often given as an example of the consequences of ignoring IP due diligence. In a recent article, the Volkswagen failure to confirm the ownership of the Rolls Royce trademark is discussed in detail. Though Volkswagen had ownership of the design, the equipment and the Rolls Royce factory, it couldn’t use the iconic front grill that was historically so typical for the vehicles.

3 Steps to Intellectual Property Due Diligence

Intellectual property due diligence consists of three very important steps – figuring out how IP affects the deal, analyzing data about IP and coming up with an action plan based on the results of the analysis.

The help of Coachella Valley mergers and acquisitions firms during the process will be invaluable. A company that has experience in all steps of the mergers and acquisition process can provide counseling and adequate advice, guiding a business through the complex legal framework.

Once the IP analysis is completed, it will be time to leverage the results and use the knowledge acquired during the preliminary phases to minimize buyer’s risk and gain leverage during the negotiations process.

Get Help From an Experienced Merger and Acquisition Firm in Coachella Valley

As during the previous phases, the assistance of a company that has experience in the mergers and acquisitions legal framework (including the collection and analysis of intellectual property information) will be of key importance for making decisions that are financially and strategically reasonable for the buyer.