Patent Due Diligence
While performing due diligence, merely checking real time status of patent with the relevant patent office may not be sufficient. For example, in case of USPTO (United States Patent and Trademark Office), proceedings pending before the Patent Trial and Appeal Board (PTAB) may not be available in the USPTO PAIR (Patent Application Information Retrieval) portal.
Specifically, proceedings pending before PTAB include trials, such as ,inter partes, post-grant, and covered business method patent reviews. Additional proceedings before PTAB include derivation proceedings, hearing appeals from adverse examiner decisions in patent applications and reexamination proceedings, and rendering of decisions in interferences.
In some cases, USPTO’s PAIR portal and other commercial databases can capture such information pertaining to patent proceedings before PTAB. However, it is likely that such information may not be up to date as there may exist a time lag between the status change and the time when such updates are recorded. Therefore, it is advisable to thoroughly perform patent due diligence by reviewing AIA (America Invents Act) proceedings. One way to check AIA proceedings to to enter the patent number directly into the PTAB portal.
During the due diligence, such pending proceedings can potentially affect the value of a patent, as it can provide insights as to whether or not the claims are upheld or found unpatentable.
Patent Upheld After AIA Proceedings
There can be cases wherein the patent claims are upheld after the AIA proceedings. However, that does not directly imply that the patent is strong or valuable because such AIA proceedings may highlight weak areas of patent claims, whereby the claims might have been amended, thereby significantly impacting the scope of the patents.
AIA Proceedings Not Instituted
In cases where petitions have been filed but AIA proceedings have not been instituted yet, the scope of patent claims can still be affected as simple filing of petitions imply arguments against the validity of the patents.
In case there parties to patent infringement proceedings (patent litigation) enter into patent settlement agreement even when AIA proceedings before the PTAB is still pending, important factors have to be considered while performing the patent due diligence. Such factors may include grounds of challenging validity that form part of public documents or petitions filed with the PTAB.
Patent Due Diligence – Best Practices
Patent attorneys and patent law firms while performing patent due diligence can follow best practices by focussing on following important factors:
- Validity of Patent
- Enforceability of Patent
- Strengths & Weaknesses of Patent
- Freedom to Operate
- Scope of Protection
- Potential Patent Ownership Issues
- Potential Infringement of Patent
Patent due diligence is crucial and important for technology transactions involving different areas of technology, which relies heavily on patents. In use, the process of patent due diligence comprises investigation about a patent and is generally done prior to patent acquisition. In most M&A (mergers and acquisitions) transactions, patent due diligence of a company’s intellectual property portfolio can play a critical role in the value of the deal.
Discuss your Queries
Frequently asked questions – Patents, Technology & Internet Laws