M&A Due Diligence with LexisNexis® PatentSight®

Jul 22, 2021

Due Diligence with LexisNexis PatentSight
Patent practitioners have unique skill sets that are typically reserved for patent prosecution. However, those skills can be quite valuable in other areas, such as when extensive due diligence is required for a client considering the acquisition of another company. When much of a target company’s value is related to its patent protection, a patent practitioner can shed light on the strength and potential of the target company’s patent portfolio. With the right tools, a patent practitioner can also identify companies that are better alternatives, to help clients ensure they acquire the company that will provide them with the most value for their money.

Evaluating Target Patent Portfolios With Patent Asset Index™

Patent Asset Index Screenshot
Before a client commits to acquiring or merging with another company, it is good to establish an understanding of the value of the target company’s patent portfolio. Evaluating the revenue produced from patented inventions is a great place to start, but that information may not be available and could also fail to provide a complete picture of the patent portfolio’s commercial potential. The PatentSight® innovation analytics platform provides patent professionals with an objective measure of a patent portfolio’s global technological strength and influence by calculating a Patent Asset Index™ for any patent portfolio a user selects within the platform.
Each Patent Asset Index communicates to users the aggregate strength of all the patents within a patent portfolio, taking into account both a patent’s Market Coverage™ (the size of the global market in which an underlying invention is protected) as well as its Technology Relevance™ (the influence a patent has based on whether it has fewer or more forward citations than patents from the same year and technology field). Determining a target company’s Patent Asset Index allows patent practitioners to perform their due diligence to determine the strength of a patent portfolio relative to the patent portfolios of similar companies, and in PatentSight it is as easy to determine as running a search on a target company’s name inside the PatentSight platform.

For more on this topic read PatentSight® Enhances M&A Decision Making with IP Due Diligence Insights.

Due Diligence Opportunities With PatentSight

Clients looking to acquire another company usually prefer to make the best use of their resources in the process. PatentSight enables users to leverage one potential acquisition target’s patent portfolio data to identify and compare alternative (and possibly better) acquisition opportunities. Starting with one target company’s patent portfolio, PatentSight visualization tools help users determine which IPC classifications and “technology clusters” are most prevalent within the target company’s portfolio. The IPC classifications and technology clusters that are most aligned with a client’s acquisition desires (i.e., the technology type in which a client is most interested) can then be used in PatentSight to identify other companies with patents in the same technological field as the original target company. Metrics like the Patent Asset Index and Technology Relevance give patent practitioners a means for ranking each acquisition candidate. Because of this due diligence patent practitioners can then advise their clients on whether the original target company is the best option for acquisition, or whether there are other players in the mix whose acquisition would be of even greater value.
PatentSight Bubble Area Screenshot

Learn how patent metrics can be used for due diligence to predict the potential impact of mergers & acquisitions.

A patent practitioner’s value goes beyond patent prosecution. In mergers and acquisitions, patent practitioners can offer due diligence insights that are invaluable for evaluating the patent portfolios of acquisitions targets, as well as identify alternative acquisition prospects. PatentSight innovation analytics make it easy to compare and rank the patent portfolios of several companies to help clients pursue acquiring the company that will provide the most value.

Read Transform Patent Data Into Intelligence and Patents in de-carbonization: Toyota leads in number,  Samsung ranks first in total strength to learn more about PatentSight and the Patent Asset Index.

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