Intellectual property (IP) continues to be a significant value driver in the technology merger and acquisition (M&A) landscape, despite declining valuations on a worldwide scale. In the ongoing churn of tech acquisitions, due diligence serves as a navigational tool to steer clear of potential pitfalls specific to this business sector.
In their article on Law360, “Tech M&A Due Diligence Checklist: Critical IP Areas of Inquiry”, attorneys Ed Batts, Carrie LeRoy, and Charles Walker—representing Gibson Dunn—provide guidance on how to approach the process and underscore essential areas of inquiry during the IP due diligence phase.
As highlighted by these experienced attorneys, due diligence in technology acquisitions extends beyond evaluating the monetary value of a deal. It involves exhaustive scrutiny of IP assets, understanding how they align with the potential acquirer’s business model, as well as anticipating potential legal issues in the future. The attorneys emphasise it’s crucial to avoid underestimating the complexity of these considerations.
This wisdom can serve as an invaluable roadmap for legal professionals navigating M&A activity in a fluctuating tech sector. The challenge lies not only in recognising the potential of an acquisition but also in understanding the often intricate legal dynamics that accompany IP assets in technology.
Given the importance of IP assets in the tech sector, due diligence can never be overstated or overprepared. The advice from Gibson Dunn could serve as critical insights to help legal professionals approach the task with the required rigor and detail.