Intellectual property protection may not be mentioned in your job description as a corporate dealmaker, but as
Ethan Horwitz, a partner in the intellectual property practice of King & Spalding says, IP and dealmaking collide often, and you can save big headaches by considering the consequences of that smashup early in the deal cycle.
For instance, when you buy a business from a competitor, chances are you're planning to somehow enhance the business' product, by improving it with your own technology, relaunching it with an advertising blitz or expanding it into a new geography. Now, say that product has been on the market for a decade or more and has never faced a patent challenge. You may move forward with the deal thinking the IP underpinning the product is safe from any infringement claim. That could be a costly mistake, says Horwitz.
"When you enhance that product, it suddenly becomes a whole lot more interesting," says Horwitz, author of the three volume "Patent Litigation: Procedure and Tactics." "You have competitors saying, 'I wasn't interested in asserting my patent position before, but now that this new guy owns it and he's bigger with better marketing abilities, I'm going to pull my patent out, dust it off and assert it against him.' "
The best defense is a thorough vetting of the product and the IP surrounding it, and an understanding of the plans to market it and any competitors who might be watching closely. -
Suzanne Stevens
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