Konstantin Linnik, Ph.D., a partner in Nutter’s Intellectual Property Department, addressed the importance of intellectual property due diligence in corporate transactions in Nutter Insights. Konstantin discussed when a company would undergo IP due diligence; the must-ask questions in the diligence process; how IP due diligence can affect a transaction; the significance of indemnifications, reps, and warranties; and how problems that are uncovered during IP due diligence can be fixed. According to Konstantin, if diligence uncovers fraud, infringement, or no documented ownership of intellectual property, then the deal may be called off. Lesser potential consequences include price and term adjustments, special indemnities for breach of reps and warranties, M&A or patent infringement insurance, or deal earn-outs.
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