Due diligence is informally referred to as a “gap analysis” or more formally an “IP audit.” It is often an overlooked tool which is important in the effective and efficient management of an IP portfolio. Due diligence is the process of identifying a business’s IP rights and evaluating whether they are properly protected and when appropriate, that the chain of title is accurate and correct. If not, this could have serious implications in the enforcement of IP rights.
Trouble-Shooting
An important aspect of due diligence is looking for any vulnerabilities or weaknesses in the IP portfolio, and devising a strategy to reduce exposure to risk. This feature, or “trouble-shooting” is recommended before selling a business or looking to attract investors, so that a strategy can be devised to address any red flags that may be identified by a potential purchaser to prevent “value leakage.”
Why is carrying out regular due diligence important?
As businesses grow and evolve, IP strategy should be closely aligned to ensure valuable IP rights are protected and any risks are managed. Due diligence can be carried out annually or ad-hoc depending on the commercial sector and size of a business. Typical scenarios where due diligence is recommended:
- A trade mark logo has been updated – Does current registered protection cover the new logo?
- Products or services have diversified – Are these protected by existing registered rights?
- Territorial expansion – Are clearance searches required? Is protection required overseas?
- IP rights to be acquired from a third party – Are the rights of interest valid and are there any vulnerabilities to be aware of before purchasing, which may impact on the price?
If you would like to know more about how we can help maximise the value of your IP, please get in touch [email protected].