due diligence franklin pierce law center 1 7 th annual advanced licensing institute concord, new...
TRANSCRIPT
DUE DILIGENCE
FRANKLIN PIERCE LAW CENTER
17th ANNUAL ADVANCED LICENSING INSTITUTE
Concord, New Hampshire
Wednesday, January 7, 2009
By Ronald I. Eisenstein
Nixon Peabody LLP
WHAT IS A DUE DILIGENCE ANALYSIS?
—Assessment of Risks
• Examination of IP
• Ownership Rights
• Mistakes
• What does IP cover?
• Are there obstacles?
—Typically part of a Larger Process
• Analysis of Science
• Analysis of Commercial Success
• Analysis of People
—What is required?
• Think about other types of due diligence
• How big is the deal?
—Who are the players?
• Counsel for both sides
• Scientists
• Inventors
• Management
—Now, Step Back …
• Before you get involved in a Due Diligence do an Internal Audit!
o Check for problems
o Correct problems
o Coordinate IP story with other parts of the company’s story
o Know what to say and what not to say
—WHY?
• Minor IP issues can get blown out of proportion
• Minor mistake can be corrected, e.g., reissue – correction of inventorship, priority claims, claiming issue, payment of maintenance fee
• Opinions can be prepared, expanded, updated
— What Type of Documents Should You Review?
• Schedule of patents, including corresponding foreign applications, continuations, divisionals, (IPs, reissues and reexamination of ownership right?
o Do you have assignments?
o Are maintenance fees paid?
o Are annuities paid?
• Schedule of patent applications, corresponding foreign applications, continuations, divisionals, and CIPs
o Is ownership right?
o Do you have assignments?
o Are annuities paid?
• Licenses and cross-licenses
• Technology research and development agreements such as sponsored research agreements
• Material Transfer Agreements
o Are there restrictions?
• Employee agreements re assignment
• Vendor agreements re confidentiality
• Requests for licenses
• Notices of infringement
• Third Party claims
o Claims of infringement
o Unfair competition
o Brach of confidentiality or non-disclosure agreement
• Prosecution files
• Opinion letters
o Non-infringement opinions
o Invalidity opinions
o Freedom to operate opinions
• Settlement or Consent Agreements affecting the use of IP owned or licensed by the Company
• Product Descriptions
—What Are Some Things You Look At?
• Product Description
o Do you have IP covering it?
o How broad are the claims?
o Do you have freedom to operate?
o What are your competitors doing?
—Third Party Counsel
• Looks at similar things
• Needs to know what the purpose of due diligence is
• It’s a risk assessment situation
• Common sense is really important
—Important:
No deal is without risk – Counsel must understand the risk and place it in perspective.