1. DUE DILIGENCE FRANKLIN PIERCE LAW CENTER 1 7 th ANNUAL ADVANCED LICENSING INSTITUTE Concord, New Hampshire Wednesday, January 7, 2009 By Ronald I. Eisenstein Nixon Peabody LLP reisenstein@nixonpeabody.com

2. WHAT IS A DUE DILIGENCE ANALYSIS? Assessment of Risks Examination of IP Ownership Rights Mistakes What does IP cover? Are there obstacles?

3. Typically part of a Larger Process Analysis of Science Analysis of Commercial Success Analysis of People

4. What is required? Think about other types of due diligence How big is the deal?

5. Who are the players? Counsel for both sides Scientists Inventors Management

6. Now, Step Back … Before you get involved in a Due Diligence do an Internal Audit! oCheck for problems oCorrect problems oCoordinate IP story with other parts of the companys story oKnow what to say and what not to say

7. WHY? Minor IP issues can get blown out of proportion Minor mistake can be corrected, e.g., reissue – correction of inventorship, priority claims, claiming issue, payment of maintenance fee Opinions can be prepared, expanded, updated

8. What Type of Documents Should You Review? Schedule of patents, including corresponding foreign applications, continuations, divisionals, (IPs, reissues and reexamination of ownership right? oDo you have assignments? oAre maintenance fees paid? oAre annuities paid? Schedule of patent applications, corresponding foreign applications, continuations, divisionals, and CIPs oIs ownership right? oDo you have assignments? oAre annuities paid?

9. Licenses and cross-licenses Technology research and development agreements such as sponsored research agreements Material Transfer Agreements oAre there restrictions? Employee agreements re assignment Vendor agreements re confidentiality Requests for licenses Notices of infringement

10. Third Party claims oClaims of infringement oUnfair competition oBrach of confidentiality or non-disclosure agreement Prosecution files Opinion letters oNon-infringement opinions

11. oInvalidity opinions oFreedom to operate opinions Settlement or Consent Agreements affecting the use of IP owned or licensed by the Company Product Descriptions

12. What Are Some Things You Look At? Product Description oDo you have IP covering it? oHow broad are the claims? oDo you have freedom to operate? oWhat are your competitors doing?

13. Third Party Counsel Looks at similar things Needs to know what the purpose of due diligence is Its a risk assessment situation Common sense is really important

14. Important: No deal is without risk – Counsel must understand the risk and place it in perspective.