Do you have experiernce with reviewing patents during DD?

searcher profile

December 12, 2022

by a searcher in Loudon, NH, USA

I'm looking at a very small manufacturer/e-commerce site that has designed, created and sells brake caliber covers for cars. There are a few other companies making and selling these and it looks like several patents exist. According to the seller, no one can patent the 'cover' part and that the patents are for the unique method of attaching these covers to the brake caliper. As I read the patents, that distinction is not clear to me.

This is a very small, start up company with a low asking price where the DD budget is practically nil. However, I don't feel comfortable proceeding without some 3rd party opinion to either validate or discredit the seller's comments. Does anyone have experience with this sort of thing or can recommend someone who does?

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commentor profile
Reply by a searcher
from University of Delaware in Holmdel, NJ, USA
What are the risks here if there is an enforceable patent? Liability for monetary damages, court ordered injunction, business value & cash flow effectively zero.

Rather than 3rd party input, is it possible to protect yourself through some contract clauses? Possibly a hold harmless clause &/or a partial hold back of the purchase price until you've earned X% back? If the seller is as confident as he claims, he should at least be willing to indemnify you..

P.S. Congrats on the podcast interview, really interesting! We should talk. I own a real estate referral-only brokerage and am pursuing marketing too.
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Reply by a searcher
from The Johns Hopkins University in Sunnyvale, CA, USA
I am not a lawyer, but if other people are selling something substantially similar and the business has done nothing to stop it...there's an "enforceability" point to make patents worth it. If this is US based, my understanding is that you have to go after anyone who even looks like they are infringing.

Who are the competitors? Do a closer look on what they sell. If you can make and sell a similar product so easily, the patent may be window dressing anyway
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