What makes the difference between a successful exit and a missed opportunity? An important lesson from Frits Schut, patent attorney at IP firm V.O. Patents & Trademarks: “A stack of patents does not make a strong company. Intellectual property is not something you have, but something you do.” Companies would be well advised to make IP a structural part of their day-to-day operations long before an acquisition.
Imagine a company is on the eve of an acquisition. The figures are scrutinized and contracts thoroughly reviewed. Intellectual property (IP) is also examined closely. Many companies will quickly point to their patents. But strong patents do not necessarily mean a strong IP position. “IP is not a box to tick on a checklist; it is an ongoing process within an organization,” says Schut. Through V.O., he has been involved in company acquisitions in the life sciences sector for more than 25 years.
The acquisition of De Ruiter Seeds
IP is therefore something you do. This is not merely a theoretical exercise. There are plenty of examples from acquisition practice. As a patent attorney, Schut was among other things involved in Monsanto’s acquisition of seed-breeding company De Ruiter Seeds. On March 31, 2008, the acquisition was announced for €546 million.
According to Schut, the company’s value did not lie in any single patent or plant variety right. “Knowledge was well embedded within the organization,” Schut explains. “It was the combination of patents, plant variety rights, documented know-how and seed banks that gave De Ruiter Seeds such an extraordinary market position.” The company also established a major technology division in South Holland, bringing dozens of scientists from Wageningen to the new research facility. According to Schut, this technology hub helped De Ruiter Seeds become a dominant player in vegetable seed breeding and gave the company a strong exit position.
Putting yourself in the buyer’s shoes
In short, “the real 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 position that is difficult to copy. According to Schut, companies should therefore put themselves in the buyer’s position well before an acquisition. “Ultimately, the buyer is primarily looking at the company’s competitive position.
“You can see this, for example, in a due diligence investigation. The question is not only how good the technology is, but above all how well the company has secured the competitive advantage that results from it.”
Important questions that arise during such an investigation include: does the right actually belong to the company I am buying? Have all inventors been named, and have the rights been properly assigned? Are there licenses or third-party rights that could restrict the use of the technology? And how strong are the key patents if a competitor challenges them?
For Schut, this touches on a broader question: what remains of the company’s technological advantage if the key people leave tomorrow? This becomes particularly tangible when it comes to trade secrets. “A company must not only say that it has confidential know-how; it must also be able to identify and document exactly what that confidential information is and what measures have been taken to keep it secret. Documentation is important for patents as well. After all, a granted patent can still be challenged years later. Can the company then still rely on experimental data, laboratory notes and technical knowledge to defend its position?”
If a company has properly addressed these matters in advance and made IP a structural part of its day-to-day operations, this gives the buyer greater confidence in the company’s long-term viability.
The experience of a serial entrepreneur
IP is not only important for established companies. Startups that expect to exit in the future would also be well advised to establish their strategy properly from day one. An entrepreneur who has experienced several startup exits firsthand 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 decades, he has founded several companies: Xpand Biotechnology, active in bone regeneration; Progentix Orthobiology, which focuses on synthetic bone substitutes; and Sinus Cell Expansion, which develops bioreactor systems for expanding cells for clinical and therapeutic applications. “I have been receiving support from V.O. in getting the IP in order since the 1990s,” says De Bruijn.
Progentix was eventually acquired by NuVasive, a major American medtech company specializing in spinal surgery. During that acquisition, De Bruijn learned, in line with Schut’s emphasis, that a patent on its own is not enough. “In addition to asking whether you can protect your own technology, you also need to know, for example, whether you are actually allowed to use it and bring it to market,” says De Bruijn. This concerns freedom to operate: investigating third-party patents that could restrict the development or commercialization of your product. “It was only through working with V.O. that I realized how much is involved in an acquisition. It is about much more than patents alone.”
In 2017, the Swiss-listed company Kuros approached Xpand with an interest in the company and its technology. Following thorough due diligence, in which IP was a key area of focus, the companies merged at the end of 2017, and the first products came to market in 2018. Sales then doubled year after year, reaching CHF 146 million in 2025, while the company’s market capitalization grew to around €1 billion. In short: a Dutch success story.
“Start Early”
The IP lessons De Bruijn has learned over the years are now being passed on to his students in London. “If you are a student or a budding entrepreneur looking to set something up, you cannot start developing your IP strategy early enough.”
Schut agrees and continues to emphasize his core message. From the very beginning, a company would do well to put itself in the position of a potential buyer. “Ask yourself: how well is my company’s technological advantage protected against competitors—and will we still be able to defend that position five or ten years after the signatures have been put on the deal?”
Those who can answer these questions convincingly before the sale will be in a stronger position at the negotiating table.
This article was written by IO+, commissioned by and in collaboration with V.O.
IO+ is an independent journalism platform that carefully selects its partners and collaborates exclusively with companies and institutions that support its mission: to spread the story of innovation. In this way, they can offer their readers valuable stories produced in accordance with journalistic guidelines.
