PLI



From PLI’s Course Handbook

Handling Intellectual Property Issues in Business Transactions 2009

#18794

4

sample Intellectual Property due

diligence Request (long form)

Kevin N. Ballack

Weil, Gotshal & Manges LLP

© 2008 Weil, Gotshal & Manges LLP.

All rights reserved.

PLI

Handling Intellectual Property Issues

In Business Transactions 2009

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Sample

Intellectual Property

Due Diligence Request

(Long Form)

Weil, Gotshal & Manges LLP

© 2008 Weil, Gotshal & Manges LLP

All rights reserved.

NATURE AND SCOPE OF INTELLECTUAL PROPERTY

1. A list of all trademarks, service marks, corporate names, trade names and Internet domain names owned or used by the Company or any of its subsidiaries anywhere in the world.

2. A list of all U.S. and foreign issuances, registrations and pending applications owned or filed by the Company or any of its subsidiaries for trademarks, service marks, corporate names, trade names, Internet domain names, copyrights and patents.

3. A list of all copyrights, patents, trademarks, service marks, corporate names, trade names and Internet domain names relating to the operations, business or technology of the Company or any of its subsidiaries that are not owned by the Company or any of its subsidiaries but to which the Company or any subsidiary has a license or covenant not to sue.

4. Date of first use of all unregistered trademarks and service marks owned or used by the Company or any of its subsidiaries anywhere in the world, and the date on which copies of any material copyrights were first released to the public.

5. Copies of all pending or abandoned U.S. and foreign applications for trademark, service mark, corporate name, trade name or copyright registration owned or filed by the Company or any of its subsidiaries, and all formal papers and correspondence related to such applications. For non-English language applications provide English translations of the application.

6. Copies of all pending or abandoned U.S. and foreign patent applications owned or filed by the Company or any of its subsidiaries. Copies of all formal papers, patent office correspondence and related prior art. For non-English language applications, provide English translations of the abstract and claims.

7. Results of any patent, trademark or copyright searches conducted by or on behalf of the Company or any of its subsidiaries, or by any U.S. or foreign patent or trademark offices and made available to the Company or any of its subsidiaries. Copies of any prior art references related to issued patents that were not submitted to relevant patent offices.

8. Report or docket showing status of all U.S. and foreign (a) patents and pending patent applications owned or filed by the Company or any of its subsidiaries and (b) trademark registrations and pending trademark applications owned or filed by the Company or any of its subsidiaries. Proof of payment of patent maintenance fees and annuities for all U.S. and foreign issued patents and trademark registrations owned or filed by the Company or any of its subsidiaries.

9. A list of all inventors of inventions that are claimed in any U.S. or foreign patents or patent applications owned or filed by the Company or any of its subsidiaries and their current employment status (for example, employee of the Company or one of its subsidiaries, independent contractor, employee of another company, etc.).

10. Copies of all invention disclosures for which patent applications have not yet been drafted.

11. Assignment documents establishing complete chain of title, current beneficial owner and owner of record for all U.S. and foreign patents and patent applications, trademark registrations, trademark applications, copyright registrations and copyright applications owned or filed by the Company or any of its subsidiaries.

12. All product/service literature distributed or to be distributed outside of the Company and its subsidiaries.

13. For each product/service presently or previously marketed, or presently being developed by the Company or any of its subsidiaries, the date on which the product/service was first publicly shown or performed, offered for sale, or otherwise disclosed or released or is intended to be first publicly shown or performed, offered for sale or otherwise disclosed or released.

14. A list describing all know-how, trade secrets, technology, technical information and computer software material to the business of the Company or any of its subsidiaries.

15. All documents relating to any policies of the Company or any of its subsidiaries addressing the protection of proprietary information, including, without limitation, invention disclosure policies and agreements, confidential information policies and agreements and employee proprietary information and inventions agreements.

16. A description of any restrictions or encumbrances to the assignment of any intellectual property or proprietary rights of the Company or any of its subsidiaries.

17. All intellectual property validity or infringement studies or legal opinions regarding the intellectual property of the Company or any of its subsidiaries.

18. All documents evidencing liens or encumbrances (including, without limitation, security interests) on any intellectual property owned by or licensed to the Company or any of its subsidiaries.

19. Proprietary rights notices used by the Company or any of its subsidiaries concerning copyright, trademark, patent and other proprietary rights (including, without limitation, notices on products or documents), dates such notices were first used and, if changed, the date or dates of change.

20. A list of all computer software owned by or being developed by or for the Company or any of its subsidiaries.

21. A list of all computer software owned by a third party and used by the Company or any of its subsidiaries (including, without limitation, all software used by or in connection with, incorporated in, or used in the development, production or provision of any products or services of the Company or any of its subsidiaries and all “open source,” “freeware,” “shareware” or other software having similar licensing or distribution models).

AGREEMENTS

22. All research and development agreements and design agreements (including, without limitation, agreements with independent contractors and consultants that participate in the development or creation of any products or services of the Company or any of its subsidiaries, and any agreements pursuant to which the Company or any of its subsidiaries is obligated to provide any development services).

23. All agreements with internet service providers and other internet-related or IT-related service providers relating to services or data provided by or to the Company or any of its subsidiaries.

24. All agreements and drafts of contemplated agreements concerning any technology or intellectual property that is licensed, assigned, sold or otherwise transferred or the subject of any covenant not to sue (or contemplated to be licensed, assigned, sold or otherwise transferred or the subject of any covenant not to sue) by the Company or any of its subsidiaries to any third party (including, without limitation, license agreements, assignments, confidentiality agreements, development agreements, consulting agreements, service agreements, cross-licenses, litigation settlement agreements, escrow agreements and agreements containing covenants not to sue).

25. All agreements and drafts of contemplated agreements concerning technology or intellectual property that is licensed, assigned, sold or otherwise transferred or the subject of any covenant not to sue (or contemplated to be licensed, assigned, sold or otherwise transferred or the subject of any covenant not to sue) to the Company or any of its subsidiaries by any third party (including, without limitation, license agreements, assignments, confidentiality agreements, development agreements, consulting agreements, service agreements, cross-licenses, litigation settlement agreements, escrow agreements and agreements containing covenants not to sue).

26. All agreements relating to provision of any products or services of the Company or any of its subsidiaries (including, without limitation, manufacturing, supply, distribution, sales, license, reseller agreements, sales representative agreements and marketing agreements).

27. All agreements with current or former employees, or current or former independent contractors or consultants, regarding the assignment of intellectual property rights to the Company or any of its subsidiaries, and a list of all such individuals or entities that did not sign such an agreement.

28. All non-competition agreements (including, without limitation, agreements containing non-competition provisions) between the Company or any of its subsidiaries and any third party (including, without limitation, any current or former employee or current or former independent contractor or consultant).

29. All agreements with third parties (including, without limitation, any current or former employee or current or former independent contractor or consultant) regarding the protection of confidential information.

LITIGATION; CLAIMS

30. A list of all judicial proceedings, arbitrations, administrative proceedings and other legal proceedings or investigations involving the Company or any of its subsidiaries relating to any patents, trademarks, copyrights, trade secrets, other intellectual property rights, products or services, including case name, case number, venue, a brief description of the nature of the claims (including, without limitation, the amount claimed and whether the claim is covered by insurance), and a summary of the status of the proceedings.

31. A description of and all documents relating to any claims or disputes involving the Company or any of its subsidiaries concerning any products, services, intellectual property or other proprietary rights owned or used by the Company or any of its subsidiaries, whether current, past or potential.

32. A description of and all documents relating to any infringement, misappropriation or other violation (or threatened, claimed or suspected infringement, misappropriation or other violation) by any third party of any intellectual property or proprietary rights owned by or exclusively licensed to the Company or any of its subsidiaries.

33. A description of and all documents relating to any activity performed, or position taken by any third party or any other information, potentially adverse to the validity or enforceability of any intellectual property owned by or exclusively licensed to the Company or any of its subsidiaries.

34. All administrative or judicial decisions or orders, arbitral decisions, consent orders, and/or settlement agreements involving any intellectual property owned by or licensed to the Company or any of its subsidiaries or the sale or provision of any products or services of the Company or any of its subsidiaries.

MISCELLANEOUS

35. All privacy policies of the Company and its subsidiaries, and all policies and procedures of the Company and its subsidiaries regarding the treatment of personally identifiable information.

36. [Note: The following in this Request No. 36 are relevant if the Company or any of its subsidiaries has any operations in Europe or transfers any personally identifiable information out of Europe. The Safe Harbor data protection arrangement is a process for U.S. companies to comply with the EU Directive 95/46/EC on the protection of personal data.]

[Safe Harbor Specific Questions:]

a. Confirm and provide evidence that the Company and its subsidiaries have signed up to the Safe Harbor data protection arrangement that was concluded between the U.S. Department of Commerce and the European Commission in November 2000.

b. Confirm that the Company and its subsidiaries publish their respective privacy policies.

c. A description of the mechanisms the Company and its subsidiaries have put in place to ensure compliance with the Safe Harbor privacy principles.

[General Data Protection Questions:]

d. Details of any person or entity used to process personal data on behalf of the Company or any of its subsidiaries.

e. Details of any request by any individual for information held by the Company or any of its subsidiaries relating to such individual that will or is likely to be outstanding at completion of the contemplated transaction.

f. Details and copies of any outstanding complaints, legal actions, prosecutions or investigations against the Company or any of its subsidiaries or other outstanding queries to the Company or any of its subsidiaries from any party (including, without limitation, any individual about whom the Company or any of its subsidiaries holds personal data, and any prosecuting authority or regulatory body) regarding non-compliance with any legislation relating to data protection, including, without limitation, any allegation by any individual that the Company or any of its subsidiaries has failed to comply with any provision of such data protection legislation, or any claim for compensation from the Company or any of its subsidiaries under any data protection legislation (including, without limitation, for unauthorized disclosure of personal data).

g. Details regarding any data protection security issues that have arisen within the Company or any of its subsidiaries.

h. If any data protection audit, either internal or external, has been conducted with respect to the Company or any of its subsidiaries, provide copies of all audit reports and details of the outcome.

37. Results of any analyses conducted by or on behalf of the Company or any of its subsidiaries concerning any competitor or competitive product.

38. All documents relating to any required compliance with the export or import of any products, technology or technical information of the Company or any of its subsidiaries.

39. A list of all outside counsel that handle intellectual property matters for the Company and its subsidiaries, including a general description of the types of matter (for example, patent prosecution, litigation, licensing, etc.), contact names and telephone numbers.

Important Notes:

• If the transaction is in a regulated industry, a separate review of regulatory compliance will be necessary to determine whether the products and services of the Company or any of its subsidiaries may be legally marketed, sold or provided. Regulatory due diligence is generally conducted as a separate component of the due diligence process.

• If there are any antitrust concerns or potential antitrust issues, an antitrust specialist should review the due diligence request list. There may be certain information, documents or materials that should be reviewed only by a limited group of individuals (for example, a “clean team,” only specified individuals within purchaser’s organization or purchaser’s attorney) or later in the deal process for antitrust reasons.

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