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IP Due Diligence & FTO

IP Due Diligence is often defined as “[a]n evaluation, performed by investors or their agents, into the details of a potential investment or purchase, where the evaluation involves a verification of all the material facts relevant to the investment or purchase”.

In a context where Intellectual Property rights are often the most valuable corporate assets, and mergers and acquisitions of legal entities are increasingly technology driven, as pointed out by Ian Cockburn IP Due Diligence is “a necessity, not a luxury”.

A successful IP Due Diligence investigation will require a combined team comprised both by technical experts familiar with the technologies to be analysed and legal practitioners with experience on the interpretation of the existing license and assignment agreements in the target company in order to assess the risks for the buyer.

ABG’s Legal team offers its clients a seasoned team of patent and trade mark attorneys and legal experts having the skill and knowledge to conduct solid and reliable IP Due Diligence investigations in the context of M&A transactions of technology transfer agreements.

Some of ABG’s legal teams’ members are ranked at the most reputed lnternational Legal Directories among the leading attorneys on IP transactions in Spain.

A Freedom to Operate (FTO) analysis seeks to identify potential barriers or limitations to the manufacture and commercialization of a product or use of a process by identifying the closest prior art and carrying out an infringement assessments between the claims of the selected patents/published patent applications/plant varieties/design patents pertaining to the prior art and a prototype product or proposed process.

FTO reports begin by searching patent literature (published patent applications and granted patents, plant varieties, utility models and design patents) and will lead to a legal opinion as to whether a prototype product or process may be deemed to infringe earlier patents owned by third parties. Apart from the strictly technical considerations on the scope of protection, key elements to be taken into account in conducting a FTO analysis include legal issues such as the legal status of the potentially harmful prior art found, its territorial scope and duration.

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