Intellectual property: the difference between an exit and failure

What’s the difference between a successful exit and a missed opportunity? An important lesson from Frits Schut, patent attorney at the IP firm V.O. Patents & Trademarks: “A stack of patents doesn’t make a strong company. Intellectual property isn’t something you have, but something you do.” Companies would do well to make their IP a structural part of their daily operations well before a takeover.

Suppose a company is on the verge of an acquisition. The financials are scrutinized, and contracts are pored over. Intellectual property (IP) is also examined closely. Many companies will quickly point to their patents. But strong patents alone do not make for a strong IP position. “IP isn’t just a box to check on a list; it’s an ongoing process within an organization,” says Schut. Through V.O., he has been involved in corporate acquisitions in the life sciences sector for more than 25 years.

The acquisition of De Ruiter Seeds

IP is therefore something you do. It’s not just a theoretical exercise. There are plenty of examples from actual acquisition cases. As a patent attorney, Schut was involved, among other things, in the acquisition of the seed breeding company De Ruiter Seeds by the multibillion-euro corporation Monsanto. On March 31, 2008, the acquisition was announced for €546 million.

According to Schut, the company’s value did not lie in any specific patent or plant variety right. “Knowledge was well safeguarded within the organization,” Schut explains. “It was the combination of patents, plant breeders’ rights, documented know-how, and seed banks that gave De Ruiter Seeds such an incredible market position.” The company also established a large technology department in South Holland and brought dozens of scientists from Wageningen to the new research facility for that purpose. According to Schut, the technology hub helped De Ruiter Seeds become a dominant player in the field of vegetable seed breeding and gave the company a strong exit position.

Putting yourself in the buyer’s shoes

In short: “The true value of a company often lies in the combination of formal rights and less visible knowledge,” he summarizes. It is precisely this combination that can give a company a competitive advantage that is difficult to replicate. According to Schut, companies would therefore be wise to put themselves in the buyer’s shoes even before an acquisition. “Ultimately, the buyer looks primarily at the company’s competitive position.

You see this, for example, in a due diligence review. The question then isn’t just how good the technology is, but above all how well the company has secured the competitive edge that results from it.”

Important questions that arise during such an investigation include: Does the company I’m buying actually own the rights? Have all inventors been listed, and have the rights been properly transferred? Are there any licenses or rights held by others that could restrict the use of the technology? And how strong are the key patents, really, if a competitor challenges them?

For Schut, this touches on a broader question: what will remain of the company’s technological edge if its key personnel leave tomorrow? When it comes to trade secrets, this becomes very concrete. “A company must not only claim that it possesses confidential know-how, but also be able to identify and document exactly what that confidential information is and what measures have been taken to keep it confidential.” Documentation is also important when it comes to patents. After all, a granted patent can still be challenged years later. Will the company then still be able to rely on experimental data, lab notes, and technical knowledge to defend its position?”

If a company has properly arranged these matters in advance and has made IP a structural part of its daily operations, this gives the buyer greater confidence in the company’s future viability.

The experience of a serial entrepreneur

IP is not only important for established companies. Startups that anticipate an exit in the future would also be wise to get their strategy right from day one. One entrepreneur who has witnessed multiple startup exits up close is Joost de Bruijn, President of Strategy & Innovation at Kuros Biosciences and Visiting Professor of Biomaterials at Queen Mary University of London. Over the past few decades, he has founded several companies: Xpand Biotechnology, active in the field of bone regeneration; Progentix Orthobiology, which focuses on synthetic bone substitutes; and Sinus Cell Expansion, which is developing bioreactor systems for cell expansion for clinical-therapeutic applications. “I’ve been receiving support from V.O. since the 1990s to get my IP in order,” says De Bruijn.

Progentix was eventually acquired by NuVasive, a major American medtech player in the field of spinal surgery. During that acquisition, De Bruijn learned—in line with what Schut emphasizes—that a patent alone is not enough. “In addition to the question of whether you can protect your own technology, you also need to know, for example, whether you’re actually allowed to use it and bring it to market,” says De Bruijn. This concerns freedom to operate: researching others’ patents that could restrict the development or commercialization of your product.

“It wasn’t until I started working with V.O. that I realized just how much goes into an acquisition. It involves much more than just patents.”

In 2017, the Swiss publicly traded company Kuros approached Xpand, expressing interest in the company and its technology. After a thorough due diligence process in which IP was a key focus, the companies merged in late 2017, and the first products hit the market in 2018. Sales then doubled year after year, reaching CHF 146 million in 2025 and a market value of around 1 billion euros. In short: a Dutch success story.

‘Start early’

De Bruijn now passes on the IP lessons he’s learned over the years to his students in London. “If you’re a student or a budding entrepreneur looking to start something, you can’t start your IP strategy early enough.”

Schut agrees and sticks to his core message. Right from the earliest stages, a company would do well to put itself in the shoes of a potential buyer. “Ask yourself: How well is my company’s technological edge protected against competitors—and can we still defend that position five or ten years after the deal is signed?”

Those who can answer these questions convincingly even before the sale are in a stronger position at the negotiating table.