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Why intellectual property due diligence is so important

by | Jul 20, 2022 | Mergers and Acquisitions

There’s a lot to keep up with in the realm of mergers and acquisitions. When making this type of deal involving a New York company, it may be a nightmare for buyers when they leave due diligence out of their considerations. IP due diligence is important for both the buyers and sellers in M&A deals.

What does due diligence mean in M&A?

In the context of mergers and acquisitions, due diligence refers in part to the process of analyzing the assets and liabilities of a target firm. The business has been chosen because it has been identified as a potentially attractive opportunity. Due diligence is the part of the process when you delve into the specifics of the deal’s projected value.

When investigating a company’s IP as part of your due diligence, you’re looking to determine the quality of their assets and how valuable they will be to your company. You’re also looking at the value of the target company as a whole. You should know about any trade secrets, including techniques or devices that are central to the product that the company manufactures.

What is included in due diligence?

One part of M&A due diligence is reviewing domain names, brand hashtags, and slogans. These types of assets are more important than ever in the information and internet age – as are publicity rights, software, and databases.

“Doing business as” or DBA refers to companies that have an assumed name, whether it’s trade or fictitious. In these cases, the legal name of the business differs from the company name as it is presented to the public. This isn’t the case for all businesses, and it may be important to know in a merger or acquisition.

There are certain questions that all potential acquirers should ask before making a deal. Doing your due diligence makes it so you aren’t in for any surprises after the deal has closed.

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