Written by: Keegan Caldwell

In the dynamic landscape of modern business, the intersection of Intellectual Property (IP) and transactional practices has evolved into a strategic alliance that goes beyond traditional legal boundaries. This powerful union now encompasses three pillars: technology scouting, M&A validation and IP strategy and monetization.

As the business environment evolves, a more holistic approach is needed—one that combines IP and transactional practices that safeguards intellectual assets and catalyzes innovation-driven growth.

Technology Scouting: Unveiling The Landscape Of Possibilities

Businesses are always scouting the latest tech. Whether it is to get ahead in an industry, streamline tasks or be among the first to try something new, IP plays an important role in identifying emerging technologies.

Typically, specialists will identify key players and targeted IP that answer their clients’ specific tech sector IP questions. By honing in on specific third-party IP, they empower a business to strategically enter or access sectors aligned with their overall business strategy.

This requires bringing together a team of subject matter experts, resources, and tools to identify emerging technologies, trends, and needs within specific industries. Business leaders can submit a request to third-party technology scouters, who will reach out to leaders with questions and information to better understand their needs. Technology scouters will then work with their teams to conduct research and analyze data before delivering results to leaders.

M&A Validation: Elevating Transactions Through Informed Decision-Making

Once the target sector and relevant IP have been identified and findings are delivered, the focus shifts to M&A validation. A firm conducts extensive IP due diligence, assessing both the target’s proprietary IP and potential third-party IP risks.

Maintaining clear, consistent, and transparent communication between companies and the firm is critical to ensuring a smooth and successful validation process.

Understanding The Process Of Due Diligence

M&A is already risky, but factoring in IP elevates that risk and adds a new level of nuance to business transactions. Because this involves assessing intangible assets, it’s not enough for organizations to claim their product, service or idea will work. We must determine that value by assessing the quality of the IP assets through due diligence.

This involves meticulously evaluating the value of the target’s IP portfolio in terms of scope, validity and enforceability within the sector; as well as scrutinizing the freedom-to-operate perspective, identifying any liabilities or third-party IP infringement risks associated with the target’s products, services or offerings. This assessment allows firms to negotiate transactions from an informed standpoint, employing tailored arrangements to mitigate risks where necessary.

Avoiding Expensive And Embarrassing Mistakes

Many of us in the IP world know the story from 1998 when Volkswagen spent around $900 million to purchase assets from Rolls Royce and Bentley. The car company thought it had everything to manufacture the vehicles until it realized the Rolls Royce trademark belonged to BMW.

With experts predicting a rise in complex, expensive and quick deals this year, M&A activity won’t slow down soon. Increased speed and pressure, combined with cyber threats and highly technical IP, will add significant challenges to these deals.

So, how can organizations avoid a situation like Volkswagon’s?

First, leverage technology. Onboard the latest best practices in cybersecurity and hire experts in the field to ensure regulatory compliance. Then, enhance your cyber safety and establish and maintain your data privacy constructs. Don’t be afraid to lean on AI. New tools and platforms are available to help streamline and optimize everything from administrative tasks to larger, more complex projects. Finally, stick to what you know. Create and follow an IP due diligence checklist, review the must-haves with key stakeholders, add clauses to protect your clients, communicate and most importantly, review!

IP Strategy And Monetization: Aligning IP With Business Objectives

A firm may implement goals that help shape a wider business strategy and tailor their IP strategy to align with a number of objectives. This can inform decisions on new IP filings, focusing on specific sectors and determining the quantity of filings needed.

In leveraging this IP approach, they can identify licensing and joint venture opportunities, explore IP enforcement and litigation avenues, and uncover funding possibilities, including IP-backed lending. This strategy ensures that IP becomes a dynamic tool for protection, revenue generation and value enhancement.

For leaders to align IP with their business objectives, they must understand how the company’s IP assets and strategies play into current and future goals. Business leaders should ask themselves which assets can be used for short-term financial gains and which ones should be saved for negotiations or growth down the road. Having a greater vision from the beginning will prevent issues down the line and help businesses build a robust and intentional IP portfolio.

Facilitating Revenue Generation And Value Enhancement

Finally, organizations can also optimize their IP portfolios. Portfolio pruning will eliminate unnecessary economic burdens or added expenses, reducing transaction costs and streamlining processes. Defensive patenting, or product-specific patenting can help prevent needing to pay costly licenses out to other third-party patent holders.

IP strategy can also be fortified when combined with other business functions. For example, utilize marketing to generate specific content catered to your industry’s target audience. Additionally, companies can leverage the results of research and development teams to support and assess the value of their IP, and navigate supply chain management to safeguard their IP.

The Power of Finding A Holistic Balance

The harmonious union of IP and transactional practices, exemplified through technology scouting, M&A validation and IP strategy and monetization, offers businesses an approach to navigating the complexities of innovation, acquisitions, and market dynamics. This alliance transcends legal functions, providing a roadmap for businesses to not only protect their intellectual assets but to strategically position and monetize them in alignment with broader business goals.

As this synergy continues to evolve, it becomes a catalyst for informed decision-making, innovation-driven growth and sustained success in the ever-evolving business landscape.

This publication is distributed with the understanding that the author, publisher, and distributor of this publication and/or any linked publication are not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, assume no liability whatsoever in connection with its use. Pursuant to applicable rules of professional conduct, portions of this publication may constitute Attorney Advertising.

Read the article on Forbes.