Private equity firm evaluates patent portfolio prior to acquisition, declines deal and saves millions in investment
“Chipworks services are pennies on the dollar compared to the cost of performing full due diligence. It’s money well spent.”
- Partner, Law Firm
Situation
A multibillion dollar private equity firm was considering buying a distressed technology company with a large patent portfolio. Working with its outside counsel, the firm wanted to evaluate the licensing potential of the portfolio as a first step in its due diligence process. Having not invested in intellectual property in the past, it sought external expertise to assess the licensing value of the patents.
Challenges
- Obtain a high level evaluation of over 1,000 patents for their licensing potential
- Receive this evaluation within a short timeframe in order to determine whether additional due diligence would be required
- Find a company able to perform the work in the timeframe specified and with the right technical capabilities
Chipworks Solution
- Evaluated the patents by assessing their strengths based on likelihood of use in the industry
- Provided recommendations on the supportability of the claims
- Delivered the analysis quickly by having engineers who could simply read the patent and make a recommendation based on their deep industry and product knowledge
Results
- Based on the evaluation results provided by Chipworks, the firm decided not to invest in the patent portfolio
- The firm saved millions that would have otherwise been invested in purchasing the patent portfolio
- The firm saved a few million dollars by not continuing with other stages of the due diligence process