The Patent Station (sm)
Law Office of Marc D. Machtinger, Ltd.

Questions & Answers

Mr. Machtinger is an experienced Intellectual Property Attorney, providing the following professional services to buyers and sellers of businesses related to Due Diligence Investigations:

  • Free initial telephone consultations.
  • Investigations related to intellectual property in merger and acquisition matters.
  • Identification of potential liabilities.
  • Verification of recordation, assignment, and ownership claims.
  • Counseling regarding enhancement of value of intellectual property assets
  • Clearance and infringement investigations of new and existing product lines, services, and related intangible assets

Questions and Answers about Due Diligence


When should Due Diligence Investigations be conducted? Due Diligence Investigations should be conducted any time a new product or service is being contemplated and any time an acquisition, merger, or substantial investment is being considered.

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When should Intellectual Property counsel be consulted? It is important to include intellectual property among the factors to be considered in any of the above situations. Intellectual property assets have become a significant portion of the value of many businesses, and much reliance is placed upon its value. Whether a target business has a patent portfolio, trademarks, trade secrets, copyright protected works, or merely offers unprotected products or services, evaluating the business from an intellectual property standpoint is vital to properly valuating the business, identifying weaknesses or potential liabilities, and conducting an informed negotiation. Intellectual property counsel should preferably be contacted from the beginning of Due Diligence Investigations, and certainly prior to the decision and negotiation stages.

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Why bother with a Patent Attorney if the target company has no patent portfolio? Even if a target business does not own patents, an investigation of existing or upcoming product lines and services should be conducted in order to perform a clearance study to determine whether risks of infringement are present. Furthermore, an audit of company trade secrets and know-how should be conducted to identify potentially patentable assets, and to insure that trade secrets are properly protected.

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What types of questions should be asked with respect to a patented product line? If a business claims patent protection over its product line, at the very least, the following issues should be considered:

1) Has the product been properly marked?
2) Does the patent actually cover the product?
3) How broadly or narrowly is the product covered?
4) How easy would it be for a competitor to design around the patent?
5) What patents are held by competitors, and what are the risks that the product infringes the rights of others?
6) Have the rights to the patent been properly recorded with the U.S. Patent and Trademark Office?

Patent counsel should be consulted to investigate all of these matters during a Due Diligence Investigation.

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How much should I spend on Intellectual Property Due Diligence? This is a business decision which should take into account the amount of money at risk, the reliance on valuations of intellectual property assets, and the potential liabilities if an infringement suit were to arise. Liability from infringement suits can be substantial, and the possibility that a product line or service might be an infringement should not be taken lightly. More may be at risk than the actual amount of the transaction at hand.

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