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IP Due Diligence

By Michael McGurk and W. Caroline Chen
July 02, 2014

Business transactions involving intellectual property (IP) require thorough due diligence, often before any meaningful negotiations, if any, take place. The primary goal of IP due diligence is to identify and evaluate the relevant IP assets of interest, and then provide sufficient information to allow the evaluating party to make an informed business decision. In theory, this process seems straightforward and without peril for the attorneys to share this information and the due diligence analysis (“work product”) with the decision-makers in the company. However, every general rule has its exceptions.

Nonpublic/Confidential Information

Innovative companies that actively engage in research and development understand the importance of protecting their intellectual property assets, including as trade secrets and patents. When opportunities arise for such a company to acquire or license a competitor's competing or complementary IP assets, the situation for the innovative company gets a bit more complex ' compared with a company that does not have any related in-house research and development activities. Because due diligence requires thorough analysis and evaluation of the IP assets to be acquired or licensed, this analysis often includes confidential and/or non-public information.

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