Due diligence is critical for verifying key information about a patent portfolio, and having a structured approach can make all the difference. When taking a deep dive into a patent portfolio, it’s incredibly helpful to understand what constitutes the portfolio and what specific assets are in play.
Whether you’re a paralegal, librarian, researcher or hands-on patent attorney, having a framework, and the right tools, to streamline your patent due diligence process, is crucial for an efficient and effective workflow.
Understand the purpose of patent due diligence
Before beginning the patent due diligence process, it is important to establish the purpose of your project. Defining the purpose of a project is essential to keeping the patent due diligence process focused, efficient, and aligned with business goals.
Whether for an acquisition, investment, or internal review, a clear objective ensures attention is directed to the most relevant risks and opportunities. Without it, due diligence can become unfocused, leading to wasted effort and overlooked issues.
Questions to ask before starting the patent due diligence process
Some questions you should consider before starting the patent due diligence process are:
- What are the pre-established outcomes needed?
- Is it an offensive or defensive report?
- Where am I starting? Has the client provided a list of assets? If not, is the attorney initiating this search for strategic reasons?
- What if there’s no asset list? If searching by company name, consider subsidiaries and affiliates—large organisations often file patents under multiple names.
- What’s the data scope? Is the search limited to U.S. patents, or should it include global filings?
- Which assets are included? Is this the full portfolio, only active grants, or does it exclude pending or expired patents?
Once you have a clear understanding of the project’s purpose, and the direction that the patent due diligence process needs to go in, then you can get started.
The patent due diligence process
1. Conduct the Search
The first step in patent due diligence is identifying the full scope of the portfolio. If a disclosure schedule listing the assets is available or a list of patent numbers is disclosed, this should be the starting point.
Pro tip: Never take the provided disclosure schedule at face value—it’s essential to conduct an independent search to verify the full scope of a portfolio. A comprehensive search allows you to compare the seller’s stated ownership with what the client believes they own, helping to identify any discrepancies before a purchase or sale.
Best practices for this process include:
- Utilising a database (PatDocs) with global coverage with search capabilities.
- Helping to leverage corporate hierarchies to capture subsidiaries and name variations, and
- Conducting comprehensive searches that include IMPADOC family expansions, family searches
- And checks for unpublished assets like provisional applications and recent continuations.
- A database like PatDocs also facilitates the review of European patent validations and helps ensure completeness and accuracy in the portfolio assessment.
Best practices for this process include:
Manually searching through thousands of international patents can be a highly time-consuming task.
To address this challenge, Minesoft has developed a patent intelligence solution that leverages artificial intelligence to significantly reduce the time needed to search, find and review patent data.
For those looking to streamline the process of navigating international patents, Minesoft offers an efficient and valuable solution.
2. Create the Initial Draft Report
Once the relevant patents have been identified, the next step is to generate an initial draft report containing all critical information. This report is going to be the first place to start arranging all information needed for doing patent due diligence.
The report should include details on the legal status of the assets:
- Distinguishing between granted patents and pending applications
- Tracking relevant legal events
- Noting national phase entries for PCT filings
- And identifying any patent term adjustments or terminal disclaimers
- Ownership data is also crucial, including current assignee information, assignment history, and application data.
Additionally, a high-level review of file history highlights, such as key office actions and critical documents, should be incorporated.
Creating draft reports
To maximise efficiency, reports should never be created from scratch. Instead, vendor-supplied formats should be utilised, and data should be exported in Excel format with links to source documents. Minesoft PatDocs can create your reports from scratch.
“It can’t be overstated that you should never start from scratch to create your patent data report. The time to put something like that together is not worth it. Minesoft can provide you with the bibliographic data, they do it in a very nice format, you can get export on a lot of things. You still have to vet it, you still have to do the due diligence, but it is an excellent starting space, and you should always start with a vendor product”
– Jennifer Vendenplas Lower & Flowy
Pro tip: It is also important to note that IMPADOC legal status only reflects the last update from national offices and may require further verification.
Exporting the publication information of a patent family, as well as the associated images straight into a word, excel or PDF document is easy with Minesoft. Automating these processes improves efficiency and saves valuable time.
3. Conduct an Asset-by-Asset Review
At this stage, the core patent due diligence work begins. The process often requires extensive fact-checking, constant updates, and repetitive verification, particularly when dealing with hundreds or even thousands of patents.
Efficiency is key
The way data is formatted and organised can significantly impact the ease of analysis. Whenever possible, reports should consolidate as much relevant information as they can in a single, structured document.
For instance, rather than simply linking to external databases like the US Assignment Database, integrating key assignment data directly into the report allows for quicker review and decision-making.
Using tools to boost efficiency & accuracy
While linking out to external sources is sometimes unavoidable, leveraging tools like Minesoft PatDocs to highlight potential issues or automate data extraction can streamline the process and improve accuracy. Effective formatting and data presentation ensure that critical information is easily accessible, reducing the need for excessive manual searching and cross-referencing.
Pro tip: Consolidate as much data as possible into a single report.
- One cell per data field: Keep status, ownership, etc. in separate cells for sorting and pivoting information.
- One line per asset: Each case gets one line. Don’t combine family members. Each asset is its own divisible right with individual issues.
- EP validations: Use EP country codes, which can help attorneys to know they don’t need to review claims if they know the EP claims.
- Avoid ambiguity: Empty fields are ambiguous. Use “yes” or “no” rather than just checkmarks or X’s that might be confusing later.
- Use of colour: Resist using colour without a key because deals can extend or resume a year later, and without explanation, it becomes problematic.
- Consistency:Make sure your reports follow a precise structure, with fields in particular order. This helps paralegals work interchangeably, attorneys understand immediately, and speeds review.
“having assignment data written in the Excel cell is more easy to digest than just having links to USP assignment database. First, because somebody has to look and that’s a mess of data, if anyone’s had to look at it, it’s not easy to filter through that. Also the USPTO is down in my experience a considerable amount of time, instead something like this, a product that can show you chain of title very clearly, very easy to identify. One nice thing about this report is that you can click on any one of those cells and it takes you to the assignment itself. Again, let the product do the work for you whenever.”
– Jennifer Vandenplas
Minesoft PatDocs enables customers to optimise their operations, by having assignment/transfer documents linked to the Excel cell for quick access and review of documents.
4. Identify Red Flags and Points of Uncertainty
During the patent due diligence process, it’s essential to spot potential ownership and legal issues that could affect a patent’s validity or value, and any discovered issues must be carefully monitored and documented.
Common Pitfalls in Patent Due Diligence
- File History and Petitions: Pay attention to petitions that affect priority claims, such as requests to revive patents or change inventorship. These can impact the patent’s validity.
- Best practice is to access these documents through a vendor tool for efficiency.
- Non-Publication Requests: A non-publication request followed by a foreign filing without proper follow-up can invalidate the U.S. patent, putting related patents at risk.
- PCT and EP Applications: Review PCT notifications and restored priority claims, as these may not be valid across all countries, leading to potential issues with intervening rights.
- EP Patent Validations and Jurisdictions: EP patents are validated differently across countries, which can complicate the due diligence process. Pro tip: be cautious with federated registers, which may not always be reliable. Vendor tools provide critical ownership details not found in the EP Register.
Unpublished Assets and National Phase Entries: Unpublished assets, such as provisional applications and national phase entries, are often overlooked in standard reports. Use tools to identify these filings, which could impact the patent’s value or validity.
Best Practices for Identifying Red Flags and Pitfalls
PatDocs aggregates critical data and links directly to essential documents like file histories or petitions. This saves you a bunch of effort.
When reviewing EP validations, be sure to understand each jurisdiction’s treatment of patents and keep track of unpublished assets and related applications to avoid missing important information.
Final tips for a successful patent due diligence review
Paralegals play a crucial role in enabling IP counsel to complete their analysis efficiently. To ensure a smooth process, it is important to clarify the scope of the project from the beginning by asking key questions:
- What is the specific purpose of this patent due diligence?
- How deep should the analysis go?
- What constitutes the full scope of assets to review?
- Are we focusing on U.S. patents only, or do we need to consider global filings?
- Should pending applications and expired patents be included?
By following this structured framework patent due diligence checklist and using patent tools to boost efficiency, patent professionals can streamline the due diligence process and produce higher-quality results.
Boost the efficiency of your patent due diligence process today
Having a clear and methodical approach to your patent due diligence is crucial for providing high-quality results. The easiest way to see a significant improvement in your patent due diligence is to incorporate specialist patent analysis tools like PatDocs into your workflow.
Not only does PatDocs save you both time and resources, but also enhances the accuracy and reliability of your final analysis, ultimately benefiting both attorneys and clients. Watch the full webinar on patent due diligence and book a demo today so we can help take the pain out of your patent due diligence process.
Patent due diligence FAQs
What is patent due diligence?
Patent due diligence is a close review of a patent portfolio to confirm and verify key information. The two most important points of information are:
- The scope of the assets – specifically where they are filed, how many there are when it comes to foreign filings or the size of family members
- The legal status of that portfolio
Figuring out things like whether it’s a pending application versus a granted patent, whether it’s alive, expired or withdrawn, and when that expiration will happen is an essential aspect to understanding the scope and the strength of a patent portfolio.
Why do patent due diligence?
Companies and their law firms conduct due diligence for two main reasons: offensive and defensive strategies.
- Offensive: A client may want to acquire or monetise patents—whether by purchasing another company’s portfolio or licensing their own IP.
- Defensive: Patent due diligence helps prepare for sales, acquisitions, or licensing deals. It also ensures their portfolio can withstand challenges, avoiding surprises when enforcing their own rights.
Mergers, acquisitions, and licensing drive much of this work, but strategic IP counselling is another major factor. This includes freedom to operate assessments, patent validity opinions, and responses to infringement claims (e.g., cease-and-desist letters).
Ultimately, patent due diligence involves scrutinising patent claims to assess enforceability, validity, and competitive positioning.
