Series 79 practice questionmediumLegal due diligence – IP ownership
While reviewing a target’s intellectual property, which of the following issues would pose the GREATEST risk to an acquirer?
- AKey patents are registered to a third-party consultant, not the company✓ Correct answer
- BPatents are set to expire in five years
- CSome trademarks are not renewed
- DThe company outsources patent filings
Explanation
Why A — Key patents are registered to a third-party consultant, not the company
If key IP is owned by third parties, the acquirer may not have legal title, posing significant risk. Expiring patents and unrenewed trademarks are important but can often be mitigated, and outsourcing filings is common.
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