Are you planning to grow your business through a series of acquisitions? If this is the case, you will need to proceed with great caution. There are a number of issues that can lead to legal problems in New York. One of them is the issue of intellectual property (IP). To address these issues you’ll have to do your due diligence.
What is the process of due diligence?
Due diligence in IP matters is essential in mergers and acquisitions. Due diligence is the legal process that you engage in to identify another company’s assets. One of the prime assets that you will be interested in will be their IP inventory.
Once you have completed this process, you will be in a position to identify the precise nature and value of their IP. You will then be able to arrive at a price that you believe is reasonable. It will then be up to the other company either to accept or dispute your offer. If disputed, more negotiations will follow.
Why is the due diligence process so crucial?
There are a number of reasons why the process of due diligence is crucial to the success of your merger or acquisition project. This is a study that will allow you to spot and potentially neutralize any risks that may be inherent in such a transaction. For example, if thorny IP issues are present, you can negotiate a settlement.
There may be issues of debt and liability that need to be sorted out before you can legally merge with or acquire a new company. IP issues may need to be treated as an aggregate or as a custody battle involving each separate component. Once resolved, you will be free and clear to operate.