Event Recap — Life Science VC Briefing: Investor Due Diligence


Reducing Legal Fees While Managing Risk: ‘What can I do in-house and when do I need an attorney?’

On Feb. 23rd, the New England Venture Capital Association (NEVCA) hosted the first VC Briefing of 2022, presented along with Cooley — with a Life Science focus: Investor IP with Due Diligence.

Dean Farmer, Partner at Cooley, brought his 20 years’ experience in IP strategy and portfolio development and IP litigation to discuss “Reducing Legal Fees While Managing Risk: ‘What can I do in-house and when do I need an attorney?’” He met with NEVCA Members including Atlas Venture, 5AM Ventures, Third Rock, AbbVie Ventures, and many others.

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After NEVCA Executive Director Ari Glantz kicked off the session, Dean introduced himself — a first-generation college student, originally from the Blue Ridge Mountains of South Carolina, the first person of his family to move above the Mason-Dixon line, and a lawyer by third career (his PhD was in Organic Chemistry and Molecular Biology).

At the time Dean was navigating the intersection of chemistry and biology, most people were unconvinced that there was a future in merging the two fields — but it became clear to him that there were abundant opportunities to create related startups that would directly impact the medical field.

Upon turning 40, Dean realized he needed to prioritize making money — and although he couldn’t find work as a chemist, he found a unique opportunity with a law firm that was looking for chemists to send to law school, in order to hire them as experienced patent agents. After about 10 years doing much litigation and nurturing his interest in startups, Dean moved to Cooley where he is currently a Partner, having been with the firm for about 12 years.

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Dean jumped into sharing highly practical, timely insights on the IP due diligence process, specifically with the innovation and venture capital community in mind. He explained the importance of the topic: not only can venture and investment groups save money by assessing the IP of potential investments, but they can also save money in knowing that not everything necessarily needs to be contracted out to a law firm to help assess.

Dean explained that investors can tell whether to kill a deal or move forward based on the answers to a few key questions.

Four questions that can be handled by yourself, without a lawyer, according to Dean:

  1. Does the target company own what they say they own?
  2. Does the target company control what they say they control, but don’t own? (licenses)
  3. Do the patent applications/issued patents “cover” what the target company says they “cover”? (claims)
  4. Do the patent applications/issued patents relate to the product/lead/platform the targe company says they relate to? (enablement/written description)

Four more, important questions that should be what you focus your time with a patent attorney on:

  1. Can third-party patent holders block the practice of the target company’s business? (freedom to operate [FTO])
  2. Are the target company’s patent applications/issued patents arguably patentable/valid?
  3. Has the target company received any offers to license/threat of litigation?
  4. Is the target company involved in any litigation, especially IP litigation?

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Catch the full insights and take-aways by watching our event recording (password: 8B5F.gi0) — and stay tuned to our social media for information about future NEVCA events.

Huge thanks to everyone who logged on and joined us — and to our sponsor, Cooley, and presenter, Dean Farmer!

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VC Briefings, a cornerstone of NEVCA programming, remain open to the public and factoring in feedback from the community, are currently being hosted virtually — typically with a field practitioners or panel, followed by an open networking session at the end of the event.

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