It would be rash to conclude a commercial deal without conducting investigations. Few people would take a lease on new premises or buy a house without legal checks.
In the IP field, risks arise in many situations. These include:
- handling inventions in your company – do all promising inventions get captured for consideration? Do employees know their obligations regarding innovations and confidential information?
- purchasing a patent portfolio – are you buying strength and competitive advantage? Or weakness and problems? Are you paying a good price? What are you committed to? Do any licence arrangements come with the portfolio?
- taking a licence under patents – ditto. And can you be removed? How can you get out if you need to?
- assessing the IP situation of a business that is being acquired. Do you have any infringement issues, whether currently active, or in the offing?
- launching a product or introducing a process. Is it safe from infringement risk? Or if there is a risk, have you evaluated it? Do you have a plan, if challenged?
In each case, the downside of going ahead without adequate due diligence can be extremely high. For example a takeover or merger may falter; expected profits may not materialise; a new product may have to be withdrawn from the market; or a financial investment in new technology may fail.
Due diligence is sometimes too skimpy, or even non-existent. This is extremely risky. On the other hand due diligence can go too far and be wasteful – rather like paying for an excessive insurance policy. Appleyard Lees is highly experienced in conducting efficient, proportionate and business-focussed due diligence work for its clients, usually in tight timescales, and to agreed budgets.