Creating a Practical and Useful Due Diligence Checklist

The process of gathering information, verifying facts and assessing risks associated with a business transaction is called “due diligence”. A key challenge in any due diligence is how to gather, verify and evaluate this information within the time and budgetary constraints of the transaction.
Prior to embarking on any due diligence with an intellectual property (IP) component, it is useful if not imperative to understand the following: 

1. What is the nature of the transaction? Is it a license agreement, an acquisition, a merger, an investment or an IPO? 
2. Is there specific technology considered key to the deal? Is access to specific technology or a product line driving this deal? 
3.  With respect to any key technology, where is it on the patent life cycle? Has it been patented? Is it an FDA approved product ? Is access to manufacturing key to the deal? 
4. Is the owner of the technology a publicly-traded company subject to the Sarbanes-Oxley Act of 2002? 
5. Is the market for the technology domestic or foreign, or both?

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