M&A DUE DILIGENCE

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Managing the risks of IP transfer during transactions.

While it is common to hear that a large part of an organization’s value is associated with its IP, it is uncommon to see much effort spent on actually reviewing that IP during M&A activities. Typical commercial contracts rely on post-transaction remedies in the form of reps and warranties, rather than taking the time to review the package of IP (patents, know-how, design documents, manufacturing instructions etc) ahead of the transaction itself.

In the absence of a pragmatic, technically driven IP due diligence process, any gaps in the IP transfer process typically lead to costly project recovery exercises which add costs to the process and delay any potential integration.

When looking at acquiring IP from any source organizations must be sure that all necessary and sufficient elements are present – that the kit of parts and instructions for use have been reviewed and independently verified.

CUBICIBUC IP Assurance

 

IP Assurance, as it is sometimes known, allows both seller and buyer to benefit from the independent review. For the seller it ensures the right kits of parts is transfers – to reduce the risk of future claims – but only the necessary IP, nothing more. A seller may also be able to demonstrate the value of the IP when it is packages well.

For the buyer the risk of acquiring IP with missing components is reduced, hence allowing the buyers ability to integrate the solutions more quickly. The buyer also has the comfort that the IP has been independently verified.

Cubicibuc – IP Assurance

The success or failure of an acquisition lies in the nuts and bolts of integration. To foresee how integration will play out, we must be able to describe exactly what we are buying (Harvard Business Review – March 2011).

Read more: Cubicibuc – IP Assurance

 


For more information about our IP Assurance service, or to discuss how Cubicibuc can help your organisation please contact us at the email below.

E-mail: info@cubicibuc.com