Merger Deals Increasingly Scrutinized Using Patent Analysis

Patent metrics have increasingly been used to assess the innovative competitiveness of technology-oriented firms in recent years. The European Commission (EC) was no different when evaluating the Dow/DuPont merger. Interestingly enough, the EC did not simply use qualitative patent analysis, they used it to identify specific Dow and DuPont business segments that needed to be divested before any merger approval would be entertained.

By using PatentSight’s Technology Relevance™, the EC was able to determine, with unprecedented precision, which products and business segments constituted a high potential in stifling innovation competition within certain markets.

Innovation is the EU’s new M&A battleground. Innovation has become “so important" for future competition “because the viability of the product line depends on your ability to keep on innovating,” said Margrethe Vestager, the EU’s antitrust chief. Patent analysis is playing an ever-increasing role in objectively measuring the innovation of portfolios and predicting the potential impact of mergers on innovation competition.