Intellectual property diligence plays a central role in shaping how companies expand product lines, mitigate risk, and protect long-term value.
In a recent webinar, Venable partners Chris Borello and Jackie DiRamio examined how IP considerations influence decisions to develop products internally or acquire them from third parties, using a hypothetical animal health company, Tripaw Health, to illustrate practical scenarios. The discussion outlined how patent, trade secret, trademark, and copyright strategies intersect with business growth and transactional planning.
Evaluating IP Risks and Opportunities
At the outset, the presenters framed diligence as both defensive and strategic. "IP diligence can inform you as to the company's resulting IP rights or what the risks are," Borello said, noting that companies must evaluate whether a new or acquired product could infringe third-party patents. He described Venable's Intellectual Property Division as a "full-service IP practice," emphasizing that litigation, prosecution, and transactional counseling often converge during product expansion.
DiRamio explained that companies considering internal development must first assess what IP they already control and whether competitors hold blocking rights. She said that diligence extends to identifying gaps in protection and determining whether freedom-to-operate concerns require redesign, licensing, or acquisition, and characterized the process as getting into the details of both a company's own portfolio and that of a potential target.
Landscape Analysis and Freedom to Operate
The webinar highlighted two cornerstone tools: landscape analyses and freedom-to-operate reviews. A landscape search, DiRamio explained, provides competitor intelligence and clarifies whether meaningful patent protection is available. "So, this not only gives you awareness of the competitors," she said, "but also what's the white space?"
Freedom-to-operate analysis, by contrast, focuses on infringement risk. "This FTO analysis kind of frames your risk of what's going to happen if we proceed," she said, noting that companies may determine the risk is too high or may pursue design-arounds. Borello added that formal legal opinions can serve a secondary function in litigation. "It does allow you to consider down the road whether you're going to rely upon that opinion…to say, well, there was good-faith basis for why we believe we didn't infringe," he said, referencing the potential to counter allegations of willful infringement and enhanced damages.
The speakers also cautioned that diligence is not static. Pending patent applications can evolve, and competitors may adjust claims in response to emerging products. "It's always a moving target, it's never just a one-time deal," DiRamio said, urging staged reviews as products advance through development.
Trade Secrets, Agreements, and Ownership Gaps
Beyond patents, the presenters devoted significant attention to trade secrets and contractual safeguards. Trade secrets offer potentially unlimited duration but require documented efforts to maintain confidentiality. "Reasonable measures of maintaining the secrecy have to be used," Borello said, pointing to employee agreements, nondisclosure agreements, and supplier contracts as key mechanisms. He warned that employees are often "the primary source of trade secret misappropriation," underscoring the importance of training and exit protocols.
DiRamio noted that modern invention disclosures increasingly address artificial intelligence tools. "I feel like AI is implicating everything," she said, explaining that AI use may raise questions about ownership rights in both patents and trade secrets.
In acquisition contexts, diligence frequently uncovers ownership gaps, particularly missing assignments from inventors or consultants. "One of the most common things we see is either not being able to find the employment agreements or not having the assignments signed," Borello said, adding that unresolved issues can delay transactions. DiRamio emphasized that consultants affiliated with universities may trigger additional complications if institutional agreements claim rights to resulting IP.
Brand Protection and Transactional Leverage
Trademark diligence, the presenters said, is equally critical. Clearance searches can prevent costly disputes after launch, and acquirers must confirm that registrations remain valid and properly maintained. DiRamio described clearance as akin to a trademark landscape review, warning against investing heavily in branding without assessing infringement risk.
Borello noted that legacy brand rights may require negotiation during acquisitions, particularly when sellers seek to retain marks tied to their corporate identity. Because brand equity often constitutes a substantial portion of deal value, the absence of meaningful trademark rights can shift pricing and negotiating leverage.
Ultimately, the speakers emphasized that IP diligence informs not only legal risk but also business valuation and strategy. "Regardless of whether it's an in-house development project or an M&A, ownership matters," Borello said in closing, reiterating that freedom to operate and enforceability concerns overlap whether a company builds internally or acquires externally.
For companies like Tripaw Health seeking growth in competitive markets, the message was clear: IP diligence is not a procedural hurdle but a central component of strategic decision making.
If you or your organization have questions about IP diligence in new product development and acquisition, please contact one of the speakers or any attorney in Venable's Animal Health and Agribusiness Law Group.