Patent Due Diligence

Introduction

Patent due diligence is the process of reviewing and analyzing patents to help a business make smart decisions. This can involve checking if others are using your patents without permission (offensive due diligence) or making sure your company is not infringing on someone else’s patents (defensive due diligence). It can also include finding ways to make money from patents, such as licensing them to others or selling them. Experts, such as intellectual property (IP) lawyers, are often involved because it requires legal and technical knowledge.

What Does Patent Due Diligence Mainly Involve?

The process can differ based on the situation, but it usually includes the following;

• Checking if a Product Infringes a Patent: Compare a product to the patent’s claims (the detailed parts of the invention) to see if it violates the patent. This includes looking at the history of the patent, claims, and how terms are interpreted.
• Checking if the Patent is Valid: Review the patent to check if it meets legal requirements such as being new and different from earlier inventions. It also involves checking if the patent clearly describes the invention or has been challenged before in a Court.
• Checking Ownership and Maintenance Issues: Verify who owns the patent and if the ownership record is correct. Ensure the necessary fees to keep the patent active have been paid as unpaid fees can make a patent expire early.

When To Perform Patent Due Diligence?

• After Receiving a Legal Warning (Notice or Cease-and-Desist Letter): If someone is warned about potentially infringing on a patent then due diligence helps one to respond carefully. It can involve checking if the claims are valid and whether one really might be infringing.
• During a Merger or Acquisition (M&A): Before buying or merging with another company, it is important to check their patents to make sure there are no legal issues like unpaid fees or invalid claims. This helps to assess the value of their patent portfolio.
• Building a Backup Portfolio: Even if someone is not planning to sue anyone then also it is a smart move to have patents ready to use in case a competitor sues. Patent due diligence helps to identify strong patents for such situations. 
• Making Money from Patents: One can earn from patents by licensing them to others or selling them. Reviewing the patents helps figure out their value and how best to use them for business benefits.

Importance Of Patent Due Diligence

Patent due diligence ensures your business is protected and ready to handle challenges like legal disputes or market changes. Whether it is defending your rights, avoiding risks, or exploring new ways to earn, this process helps businesses use patents to their advantage.