Ip And m&A
businesses is its workforce, and whilst the There can also be specific pitfalls relating
“dUe dILIGence SHOULd
accounting standards don’t necessarily allow to certain industries, says Robinson at
you to report its value, we still often do it in Deloitte. He notes that the pharmaceutical
be extended tO tHe
order to assess a contributory charge under an
industry can be particularly difficult. “There
tArGet cOmpAnY’S excess earnings method,” he says.
are a number of development stages, and
trAdemArKS, trAde
significant investment is required for product
Common pitfalls often follow a successful merger
development, without the guarantee of an
SecretS And
if straightforward housekeeping measures are
adequate return,” he says.
cOpYrIGHtS. It IS ALSO
not carried out. Companies generally pour
resources into pre-merger checks, but then
He adds that the valuation of a big
ImpOrtAnt tO cHecK
forget to record the change in title or to register
pharmaceutical IP portfolio for financial
tHAt YOU WILL HAVe
newly acquired assets. By not carrying out these
reporting purposes might take three to four
tHe rIGHt tO USe A simple protection measures, companies open
months, and finalising it might even take up to
pArtIcULAr Internet
themselves up to IP infringement.
a year, due to the level of complexity.
dOmAIn nAme. JUSt
“IP assets potentially prohibit other people
Importance of due diligence
becAUSe YOU OWn
from doing things with your property,”
Despite the recent turmoil in the financial
tHe trAdemArK, It
explains Khwaja. “It’s a monopoly right to
markets, IP assets continue to be recognised
use a particular mark or exploit a particular
dOeS nOt meAn tHAt
as a critical source of value and risk in M&A
invention, and you can stop other people from
transactions, according to a mergermarket
tHe cLASSIc dOtcOm
doing the same. If you don’t record the change
survey. Fifty-two percent of those surveyed
dOmAIn nAme LInKed
of title in that particular asset in the UK, your
thought IP would become more important to
tO tHAt trAdemArK
right to claim damages for any infringement
overall M&A activity in the next five years.
is affected.” Companies may also want to
When evaluating a target, IP assets were
WILL be AUtOmAtIcALLY
consider keeping on key staff following a viewed by 79 percent of respondents as being
AVAILAbLe.” merger to ensure that important knowledge
as important, or more important, than other
and experience are not lost. assets.
12 World Intellectual property review September/October 2009 www.worldipreview.com
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