Patent Due Diligence

AuthorLacy Kolo
I. Introduction
Patents are often considered one of the strongest forms of intellec-
tual property (IP) protection, driving the rising market of patent-
based acquisitions. Patent law is a highly specialized legal eld,
with a rich tapestry formed of statutes, case law, and history. For
this reason, although determination of ownership of patent rights
may be conducted by counsel who does not specialize in patents,
deep due diligence of several areas of patent law must be con-
ducted by competent patent counsel with expertise in the specic
technical area of the patent claims.
The goal of this chapter is to identify what counsel should ask
for, look for, and do in performing due diligence regarding a pat-
ent. Therefore, this chapter takes you step-by-step through the
process of a due diligence.
Section II of this chapter covers general background about
patents. This section includes a discussion of the general portions
Patent Due Diligence
By Lacy Kolo*
*I am grateful to all of those with whom I had the pleasure of working in pulling
this project together. In particular, I would like to give special thanks to Emily Josef
for her careful and thorough review of this book. I would also acknowledge, with grati-
tude, the support and love of my husband, Brian, without whom this book would not
have been possible.
of a patent, a description of how patents are obtained, and deni-
tions of some common terminology used in the eld.
Section III covers the persons who have knowledge of the pat-
ents of interest and their related technology. Section IV covers the
types of documents that should be solicited and reviewed to con-
duct an investigation. These documents include agreements with
regard to ownership of the intellectual property, patent-related
dispute documents, and prior research documents on the patents.
Further, this section covers the types of documents that convey
rights to a patent, whether such rights are inbound or outbound.
The remainder of the chapter discusses how to conduct due dili-
gence on a patent portfolio. Section V covers how to determine the
universe of patents involved in a transaction, and Section VI covers
how to conrm inventorship and ownership of the patents. SectionVII
discusses determination of the patent status and term. Section VIII
tackles the key question of whether the patents of interest cover
the products and services of the patent owner. Section IX provides
a method for conducting due diligence on the strength of the pat-
ents, including patents generated before and after the Leahy-Smith
America Invents Act (AIA).1 Design patent due diligence is covered in
Section X. Note that plant patents are covered in depth in Chapter 13.
The value of a patent is inherently tied to its ability to exclude
others from the marketplace. Given this, Section XI covers how
to conduct an infringement analysis and develop evidence-of-use
charts. Sections XII and XIII cover enforceability of a patent and
the conduct of due diligence on a patent that has been involved in
a litigation proceeding. Finally, Section XIV touches on due dili-
gence for standard essential patents.
II. Patents: A Background
Before moving forward in this chapter, it is important that you rst
understand the general language and descriptions used by patent
practitioners to review a patent and its associated documents.
1. Pub. L. No. 112–29, 125 Stat. 284 (2011).
Patents: A Background 227
A. Structure of a Patent
There are four main parts of a patent: the face or cover of a pat-
ent, the drawings, the specication, and the claims.
1. The face or cover of a patent is the rst page of the patent.
The cover shows the title of the patent; the inventors at
time of publication or issuance; the ling date; the issue
date; chain or priority; a one-paragraph summary of the
invention; and one representative drawing.
2. Next, the drawings or gures are listed in the patent.
Each portion of the gure that is considered to be sig-
nicant is assigned a representative number (101, 102,
103, etc.). These numbers are used to match up the gure
parts to the specication description of the gure.
3. The specication is a written narrative that fully sets
forth the invention as a whole. The specication may con-
tain a background on the current technical eld, followed
by a detailed description of the invention (referencing
the gures), and the variations or embodiments of the
4. The last part is the claims, located at the back of the pat-
ent. The claims dene the legal metes and bounds of an
invention. Each claim is separately numbered and sets
out what the inventor believes are the key elements of
the invention. Claims can be independent or dependent.
Independent claims stand alone without referencing or re-
quiring another claim. Dependent claims require another
claim and add one or more limitations or elements to the
claims that they rely upon.
It should also be noted that in the United States it is common
today to have the application publish twice: once as an application
with a set of claims that are still being negotiated with the U.S.
Patent and Trademark Ofce, and then again when the patent
issues with the nal set of claims. Because of this sequence, up to
three numbers may be used to refer to a specic patent: its ling
or serial number, the publication number, and the issue number.

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