Correspondence: Beverly W. Lubit, Ph.D., Partner Information Technology/Intellectual Property Group, Wolf, Block, Schorr & Solis-Cohen LLP, 250 Park Avenue, New York, NY 10177, USA Tel: +1 212 883 4930; Fax: +1 212 692 1130; E-mail: blubit@wolfblock.com

¹focuses on Hatch–Waxman issues in litigation and transactional matters, patent prosecution, litigation, interference practice, opinion letters, licensing matters and IP due diligence, with a particular emphasis on life sciences and biotechnology. She is admitted to practice before the patent bar, the New Jersey and New York State bars, Eastern and Southern District of New York, District of New Jersey and the Court of Appeals for the Federal Circuit. WolfBlock provides a comprehensive range of patent, trademark, copyright, licensing and auditing services to clients both large and small in the United States and abroad.

Received 28 January 2008; Revised 28 January 2008; Published online 26 February 2008.

Abstract

Due diligence is a necessary component of any transaction. One way or another — before the deal or during litigation involving the circumstances of the deal — a company involved in a transaction is going to have to do its due diligence. The objectives of due diligence are: (1) to identify risk to an appropriate level of detail in a due diligence report by understanding the assets of the target, issues relating to the target and how those issues may affect its ability to continue to operate its business and (2) to ensure informed drafting of the transaction documents so that they both shield the parties from liability and ensure the worth/value of a proposed transaction. Risk is identified by recognising hidden or unexpected liabilities and/or major regulatory obstacles to the acquisition. Intellectual property (IP) due diligence is a key component of technology-driven deals. Its purpose is to assess the scope, validity and enforceability of the target company's IP. A due diligence investigation involving generic medicines has specialised requirements. This paper will serve as a guide on how to make the most of IP due diligence in such deals.