As I indicated In Part I on this topic, there are very, very few M&A transactions that do not involve intellectual property capital of some form or another. Whether ancillary to the core assets or integral to the company’s bottom line, it is essential to address the intellectual property involved. Unfortunately, such diligence is not always performed, or otherwise performed inadequately, and the company purchasing the assets is usually left picking up the pieces.
Oddly, in my experience, the little things really do matter in any intellectual property due diligence in an M&A transaction. From missing licenses that expose the purchaser to potential copyright infringement (including, but not limited to, the ever-so friendly Business Software Alliance demand letter and software audit) to improper assignments of patents, you would be stunned at how the little things can add up to a heap of liability, What is worse, many of these potential legal land mines can be avoided with the proper focus and the assistant of astute counsel.
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