Due Diligence Analysis for Patent Protection

Whether you’re a new company seeking startup funding, or an established business negotiating a license agreement, it’s important to know the potential risks and benefits pertaining to the transaction and your IP. A due diligence analysis looks at your patent portfolio from a number of different angles in order to reduce your risks associated IP and eliminate factors that might depreciate its value, in order that full value is assigned in the case of a sale or license agreement.

The first priority of a due diligence analysis is to ensure that individual inventors and the company have established, with the proper paperwork, who owns rights to the technology, underlying development of the technology and within what field of use, geographic territory or other parameters. Secondly, an assessment of the inventor's freedom to operate is performed, determining how the IP can be used without infringing on other third-party patents and applications. An analysis of the strength of your IP will determine whether maximal value is being generated by aligning your business strategy with IP goals…that is, expanding patent protection beyond the invention itself to include methods of creating it and business methods specific to your industry.

Due diligence will also means ensuring you have sufficient evidence, should you wind up in court, to demonstrate that the invention was first discovered by the patent-holders. This means proper maintenance of the laboratory notebook, data banks, publications, etc., that demonstrate the discovery process and development of the invention into a marketable product.

_Source:

Restaino, L. 2006. Understanding Your Patent Portfolio: Reducing risk through due diligence. BioProcess International, 4(9):12-16.