A patent due diligence report is an essential document that provides a detailed analysis of a company’s intellectual property assets, including patents, trademarks, and copyrights. The purpose of this report is to assess the strength and value of a company’s intellectual property portfolio, identify any potential legal issues or risks associated with the portfolio, and evaluate the potential for future revenue generation.

Crafting an effective patent due diligence report necessitates legal expertise and business acumen. Companies must gain a comprehensive overview of their portfolios, as well as any risks or opportunities that could affect their long-term goals.

Patent due diligence report

A well-written report should be easy to comprehend and give the reader a concise overview of the status, key issues, and any underlying concerns. Here are some steps to follow when crafting an effective patent due diligence report:

1. Review the Patents-at-Issue

What are patents-at-issue

The patents-at-issue are those granted by the USPTO to a company or inventor. They provide them with an exclusive right to make, offer, use, sell, import, or distribute the patented product, process, or service.

A patentable invention is a novel and useful process, machine, manufacture, composition of matter, or improvement that meets certain eligibility criteria. If the applicant meets these qualifications, then the USPTO will grant them a patent.

To acquire a patent, an application must be submitted along with filing fees. The USPTO will examine the application to determine its eligibility for patent protection and issue a formal Notice of Allowance. This notice sets forth a three-month deadline for paying the issue fee–the final step required to secure your patent.

Post-grant review

Post-grant review (PGR) is a process established by the USPTO for correcting or challenging issued patents. This can be part of an effort to revalidate a patent prior to licensing or litigation, or it can assist patent owners or defendants in determining whether their patent was granted in error.

Defensively, a successful defensive reexamination request early in a case can result in a stay of the infringement litigation, facilitating settlement and licensing discussions while minimizing or deferring attorney’s fees and expenses.

Challenging the validity of a patent during the post-grant review

At present, there are two primary methods for challenging the validity of an issued patent: inter-partes review and post-grant review. The former involves filing a trial proceeding before USPTO’s Patent Trial and Appeal Board; while the latter necessitates filing a petition directly with the USPTO itself.

IPR is generally a swift process, with final decisions typically reached within two years of filing the petition. However, the USPTO retains the discretion to deny an IPR petition on various grounds such as those set forth in Apple v. Fintiv when parallel litigation over the same patent is taking place in federal court or the International Trade Commission.

Additionally, the USPTO’s Director of Patent Policy and Practices has the authority to review patent office decisions, including those from the PTAB. She recently issued interim guidance regarding Fintiv, a controversial ruling which preempted valid patent challenges in some instances.

To get a patent, you first have to file with the USPTO

2. Review the Patents-at-License

Companies have several ways they can utilize the patents in their portfolio to achieve business objectives. These may range from offensive and defensive strategies to monetization through licensing or divestment of those patents.

It is essential to thoroughly evaluate all patents involved in a transaction to confirm they are valid and enforceable, without violating anyone else’s patent rights. This is especially pertinent when the patents will be utilized for an entirely new line of business or product that could cause future legal challenges.

Components of a patents-at-license review

It’s essential to determine any ownership and chain of title issues that may arise. For instance, if a patent is owned by multiple entities, any defect in its title chain could significantly devalue it and make enforcement in court more challenging. Furthermore, failure to pay maintenance fees associated with a patent could result in its early expiration or invalidation.

It is also important to review any patent litigation that has taken place during the life of a patent in question. This could include reviewing settlement agreements and any communications alleging patent infringement.

When reviewing patent claims during licensing diligence, it’s essential to determine their scope. A potential licensee needs to determine if the patents-at-issue will encompass the technology they wish to commercialize under the agreement.

Once a potential licensee has determined the scope of a patent’s claims, it is essential to research any dominating third-party patents that might hold similar technologies. These patents could present significant obstacles in exploiting the licensor’s patented innovations.

Finally, it is essential to determine who invented a patent’s claims. Without accurate inventorship information, an invalidity challenge may arise based on a lack of documentation in the patent application.

Review intellectual property involved in a transaction to check whether they are valid oe enforceable.

3. Review the Patents-at-Sale

When a company seeks to acquire another business, an effective patent due diligence report should be created in order for the acquirer to assess any potential issues that could disrupt the deal. These could include strategic, economic, and procedural elements of acquisition.

What a patents-at-sale review entails

This assessment involves a careful review of each asset to be purchased, helping identify the most valuable ones and prioritize them according to value. It will also reveal any potential ownership or chain of title issues.

These problems can have a major impact on the sale price and lead to major difficulties down the line. Therefore, it’s essential that these matters are resolved prior to closing on a deal.

A comprehensive analysis of intellectual property must also include an assessment of the validity of claims. This step is vital in the assessment process as it will ultimately decide if a patent can be protected. Furthermore, it will examine whether written description requirements are satisfied – required under US law for all patents to be valid.

An assessment of the written description requirement will help guarantee that an invention is sufficiently described in words and drawings to grant adequate protection to its patentee. Doing this can shield your business from invalidating its patent, as well as shield it from being challenged by competitors.

Other issues to be investigated during a quality check include claim language, prosecution histories, and any changes or legal arguments made during the patent process. Changes made during prosecution can restrict the scope of protection offered by a patent and may even lead to its invalidity.

Evaluation of a patent portfolio may also necessitate an examination of any license agreements made with third parties. These should be assessed to ascertain their enforceability and to rule out any illegal practices.

Finally, it is essential to confirm the status of maintenance fees and renewal fees associated with each asset being reviewed. Doing this will guarantee they are paid on time, protecting any lost rights.

4. Review the Patents-at-Vendor

A great patent portfolio can be an invaluable asset for your business. It helps you develop new products or services, safeguard your brand and create value for shareholders. However, before investing in it you must assess its quality and strength.

Therefore, it is essential to review the patents-at-vendor to confirm they cover the relevant subject matter and are valid and enforceable. Doing this can help you assess if a deal has any chance of succeeding or not, as well as whether there will be positive or negative repercussions for your business.

This section can be the most laborious and time-consuming, as it requires an exhaustive review of patents owned by the vendor. Furthermore, extensive research will need to be done into prior art references as well.

Review the patents at vendor to ensure they cover the relevant subject matter.

What a patents-at-vendor review entails

When reviewing patents-at-vendor, the initial step should be to identify which technologies or products are encompassed by the patented inventions. This can be accomplished through an extensive search of USPTO patent records.

It is essential to review any existing licensing agreements with the patents-at-vendor and their related documents for legal status, ownership, and chain of title, as well as maintenance fees. Doing this is a necessary step in crafting an effective patent due diligence report that offers accurate and actionable data to your business.

Another aspect of this review involves assessing the litigation history of patented inventions. Doing this helps you identify any hidden litigation issues that could potentially lead to future lawsuits.

Furthermore, it will assist you in determining whether a current or former owner of the patented inventions is likely to sue for infringement. This could have an immense effect on both your ability to make an informed decision about the transaction, as well as any damages awarded should there be successful litigation.

Finally, it is essential to assess the validity, enforceability, and novelty of patented inventions. Doing this will guarantee that these innovations are valid and enforceable under intellectual property rights.


Crafting an effective patent due diligence report requires a thorough understanding of the company’s intellectual property assets and the industry in which it operates. By following these steps, you can develop a comprehensive report that identifies any potential legal issues or risks associated with the portfolio, as well as the potential for future revenue generation.