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Rajah Lehal

Blog Bite: What steps should be taken to due diligence IP for M&A?

July 13, 2015

Link from this article: Read the article here.

When one company acquires another, especially if the acquired company’s major assets include IP, the question often arises of whether the acquirer has purchased a company…or a lawsuit. IP due diligence should begin early, and care should be taken that IP reps and warranties are adequate to protect against third party claims.

This article addresses the IP risks that arise in mergers and acquisitions. The article notes that a joint owner of a patent can grant a license to a third party without the approval of the other joint owner (under US patent law). For contract negotiators entering into an IP license or transfer, the use of covenants or post-closing conditions may solve this problem, or the use of restrictions on the granting of sub-licenses.

Read the article here.

Take away:

  • In M&A, IP due diligence should be an early priority.
Intellectual Property
Grant of Licence
Commercial Activities
IP Transfer

Written by Rajah. Rajah Lehal is Founder and CEO of Clausehound.com. Rajah is a legal technologist and technology lawyer who is, together with the Clausehound team, capturing and sharing lawyer expertise, building deal negotiation libraries, teaching negotiation in classrooms, and automating negotiation with software.