In today’s high-stakes startup landscape, intellectual property (IP) can either be a catalyst for growth or a silent deal killer. Few understand this better than Marcus Wolter, Partner & Global Director of Corporate Practice at Caldwell and a former M&A lawyer  at Freshfields, who has helped dozens of high-growth tech companies scale and protect their IP globally. After over a decade advising startups and corporates across Munich and Tokyo, Marcus is now on a mission to make legal services more innovative, accessible, and cost-effective. In today’s high-stakes startup landscape, intellectual property (IP) can either be a catalyst for growth or a silent deal killer. Few understand this better than Marcus Wolter, Partner & Global Director of Corporate Practice at Caldwell and a former M&A lawyer  at Freshfields, who has helped dozens of high-growth tech companies scale and protect their IP globally. After over a decade advising startups and corporates across Munich and Tokyo, Marcus is now on a mission to make legal services more innovative, accessible, and cost-effective. Marcus Wolter Marcus Wolter In our conversation, Marcus unpacks the most common IP mistakes startups make — from filing too late to overprotecting in the wrong markets — and explains how a lean, balanced IP strategy can signal maturity and unlock higher valuations. We also discuss how AI is transforming due diligence, enforcement, and the economics of legal work itself. Let's dive in. Startups and the IP Trap: Too Late or Too Much Marcus, you've worked with high-growth companies to protect their IP globally. What's the biggest mistake you see startups making? It's hard to name just one, but two mistakes stand out. One common mistake is starting far too late with protecting key assets — whether it’s a brand, a trademark, or core technology –  through patents. Sometimes it happens because the company lacks funds, or simply because the founders aren’t aware of the risks and haven’t educated their team. Whatever the reason, delaying IP protection often leaves the business exposed at critical moments. Whatever the reason, delaying IP protection often leaves the business exposed at critical moments. The other scenario is a well-informed founder who understands the value of IP and is willing to invest in it — but ends up overspending by filing in jurisdictions that make little business sense. For example, a U.S.-based startup spending money on patents in countries where they have no foreseeable business plans, like, say, filing in Madagascar. Such filings only make sense if you genuinely plan to enter that market. Otherwise, you’re wasting resources, especially if the jurisdiction has weak IP enforcement — meaning even if someone infringes your rights, local courts may be too slow or ineffective to offer real protection. Many companies, especially corporates, maintain huge portfolios filled with irrelevant or inactive patents and trademarks. These portfolios require ongoing maintenance — legal fees, government fees, and internal resources. This is actually one of the first steps we take at Caldwell when onboarding a client with a large IP portfolio, though it sometimes means reducing our own potential revenue. We start by identifying and cutting out the "dead weight." There's no value in maintaining IP that no longer serves a purpose or contributes to the business. This often sparks very productive strategic conversations with the client: What is the real purpose of this IP? Where is the business headed? What do we actually want to protect and why? What is the real purpose of this IP? Where is the business headed? What do we actually want to protect and why? It's a refreshingly honest approach, and while it may not be the most lucrative path for us in the short term, it usually leads to a much more focused, intentional IP strategy. A lean, focused portfolio is not only more efficient — it signals maturity and strategic clarity. Ultimately, the issue boils down to not having a balanced IP strategy. You need to protect your core brand and core technology in the markets where you actually plan to operate or commercialize. Overprotection drains resources. Underprotection leaves you vulnerable. Overprotection drains resources. Underprotection leaves you vulnerable. Both are avoidable with proper education and strategic planning. IP and M&A: How to Avoid Deal Breakers How often do IP issues become deal breakers during M&A? IP issues can and do break deals. In one recent transaction, a buyer discovered that a research institute still owned key patents because the startup's founders had never executed proper IP assignments. That part of the deal fell apart. While most deals don't collapse entirely due to IP issues, brand protection problems are particularly serious. If a target company's brand isn't registered or has lapsed in a market that's central to the expansion strategy of the acquiring company, that can significantly reduce the deal value or halt progress. Founders can mitigate this risk by auditing their IP portfolio before entering a fundraising or M&A process. Ensure IP assignments with employees and founders are in place. Document the chain of title. Organize everything in a data room. Your goal is simple: prevent negative surprises after the valuation is locked in. Using AI for Smarter IP Audits and Sell-Side Due Diligence What tools can help startups that can't afford full legal support? At Caldwell, what we currently offer our startup clients is a fixed-fee service built around our own AI tech stack designed for M&A and venture capital use cases. While it's typically used on the buy side to support legal teams in evaluating a company, we've adapted it for early-stage startups to conduct a kind of "sell-side" due diligence—something almost no one does at this stage. Here's how it works: our AI explores a company’s data room and runs a comprehensive checklist to identify gaps, red flags, and any potential issues. We're not providing legal opinions—this isn't a substitute for a full lawyer-led review, which would be far more expensive—but AI is very effective at surfacing key risks or missing documentation that might raise concerns for investors later. The goal is simple: eliminate negative surprises after your valuation is locked in. The goal is simple: eliminate negative surprises after your valuation is locked in. The goal is simple: eliminate negative surprises after your valuation is locked in. As the target company, your job is to stay ahead by preparing properly. Even if you don't have the budget for formal IP filings, you can still educate yourself, get strategic guidance, and proactively organize your data room. That alone can make a significant difference. The AI Shift: From Infringement to Enforcement With AI generating deepfakes and misinformation, how will trademark law keep up? That's a really important—and complicated—question. We're already seeing conflicting court decisions in the U.S. around AI and copyright. There's no consistent standard yet for what qualifies as protectable IP when AI is involved. And when you look internationally, the legal treatment of AI-generated inventions or contributions varies even more. Some jurisdictions focus on the person programming the machine, while others are still unsure how to classify AI-driven outputs. In trademarks, things are a bit clearer—for now. Recent court decisions suggest that in the metaverse or Web3 environments, the same trademark rules apply. If you create a virtual product that mimics a real-world brand—say, a digital "Birkin" bag made with Sora and labeled as such—that's still a trademark infringement, regardless of the tool used. Whether you painted it by hand or generated it with AI, you're still using someone else's protected mark. What's more complex is determining liability. Is it the user, the AI developer, or the platform that's responsible? That question doesn't have a clear answer yet, and it likely won't for some time—especially as jurisdictions take different approaches. Is it the user, the AI developer, or the platform that's responsible? But there's another side to this: enforcement is becoming faster and cheaper, thanks to AI. Yes, AI tools might increase the volume of potential infringements—whether it's synthetic content, NFTs, or digital replicas—but they also make it easier to detect and act on them. Blockchain, automated monitoring, and low-cost legal tech solutions are shifting the dynamics. Blockchain, automated monitoring, and low-cost legal tech solutions are shifting the dynamics. Blockchain, automated monitoring, and low-cost legal tech solutions are shifting the dynamics. For example, we recently saw the first fully licensed AI law firm launch in the UK, specifically for handling small claims like unpaid invoices. They can now send a legal letter for just £2. That used to cost at least £250. It's a massive reduction in legal transaction costs—and the same logic applies to IP enforcement. We're already seeing startups offering subscription-based IP monitoring, scanning both the traditional web and Web3 for infringements. Soon, cease and desist letters will be just as streamlined. This shift is already visible in our own work at Caldwell. In M&A deals, by leveraging AI in drafting and due diligence, we're achieving 50–60% productivity gains, depending on the deal complexity and jurisdictions involved. And we're not just pocketing those gains—we're using them to reduce client costs. That's actually one of the reasons I left Freshfields: I wanted to build something that made legal services more efficient and affordable, not more expensive. Yes, AI makes lawyers more valuable through increased productivity, but that doesn't mean each task should cost more. On the contrary, costs should go down—and we're proving that they can. At Caldwell, we've spent the past 18 months building this model, working with leading AI companies, and even spinning out a separate tech entity to drive innovation in legal services. Ultimately, AI isn't just transforming how we do legal work—it's transforming the economics of legal work. Ultimately, AI isn't just transforming how we do legal work—it's transforming the economics of legal work. Ultimately, AI isn't just transforming how we do legal work—it's transforming the economics of legal work. From IP enforcement to M&A, we're entering an era of faster, cheaper, and more accessible legal services. Cross-Border IP: What the West Can Learn from Japan How does Japan compare with the West in IP and startup innovation? There are significant differences in how regions approach IP — and Japan is a prime example. After the U.S. and China, Japan ranks among the top patent filers worldwide, with a strong enforcement environment. But despite this, many Japanese companies sit on massive underutilized IP portfolios. We’ve started working with large Japanese corporates to explore how they can actively manage those portfolios — whether by monetizing dormant patents, pursuing licensing opportunities, or even selling IP assets. The challenge is cultural and educational: in Japan, patents are often treated as passive assets. But a patent that isn’t used — either to protect your business or to generate revenue — becomes a sunk cost with no real value. This contrasts sharply with the U.S., where IP is aggressively leveraged for licensing, monetization, or even used as collateral. Europe tends to sit somewhere in the middle. We see similar patterns in the startup space. Unfortunately, Japanese investors are still underrepresented on cap tables of top startups — aside from outliers like SoftBank. That’s part of why we’re expanding in Japan, with a new Tokyo office opening in September. There’s a genuine appetite for startup success, supported by government-backed funds and a push for innovation. However, Japan still struggles with building consistent deal flow, and that’s where we believe we can help — by bridging the gap between capital and execution. Beyond capital, Japan has strengths the world should recognize: Uncompromising quality standards, especially in hardware manufacturing.
Strategic positioning in the world’s fastest-growing region — Southeast Asia.
A liberal democracy with rule of law, making Japan a reliable launchpad for expansion in Asia. Uncompromising quality standards, especially in hardware manufacturing. Strategic positioning in the world’s fastest-growing region — Southeast Asia. A liberal democracy with rule of law, making Japan a reliable launchpad for expansion in Asia. Japanese investors often take a different approach. They may not match Western valuations but bring strategic value — such as market access in Southeast Asia, where they have deep operational experience and trusted networks. This collaborative mindset helps Japanese firms remain competitive in major deals — including U.S. scaleup acquisitions in the $650–750 million range, like the one we’re currently advising a Japanese client on. I wish more Japanese corporates would double down on these advantages. We already see it in biotech, gene editing, and pharmaceuticals — sectors where Japan remains at the forefront globally. For us, this isn’t just business. It’s a passion project — connecting ecosystems and helping both sides of the world learn from each other. It’s a passion project — connecting ecosystems and helping both sides of the world learn from each other. Cannabis, Crypto, and the Second Mover Advantage You've recently mentioned in your LinkedIn post that the cannabis industry is at a turning point. What do you mean? It’s no secret that many major players in the cannabis industry — even some of the most successful ones — are facing a liquidity crunch. Much of this stems from regulatory headwinds in the U.S. Many expected federal regulations to soften faster, including de-scheduling. But with that still pending, cannabis companies continue to face major tax disadvantages — for example, they can’t deduct business expenses — putting significant pressure on cash flow. At the same time, operating costs remain high due to fragmented regulatory frameworks across different jurisdictions. Despite all this, many of these companies are far more mature than they were a decade ago. They’ve built solid business models, invested heavily in IP — from patents to trademarks — and cultivated valuable brands. What we’re seeing is a frustrating paradox: external factors are depressing valuations, while the underlying business fundamentals and market demand have never been stronger. The cannabis market isn’t a passing fad — much like crypto, it’s here to stay. Consumer demand, especially among younger generations, is shifting toward edibles and cannabis-infused beverages over traditional alcohol. Right now, investors have a unique window — almost a “second-mover advantage” — to enter a market of mature, well-run businesses whose valuations are artificially low due to temporary external pressures like regulation, tax policy, and tariffs on imported products. Right now, investors have a unique window — almost a “second-mover advantage” — to enter a market of mature, well-run businesses whose valuations are artificially low due to temporary external pressures like regulation, tax policy, and tariffs on imported products. If you pick the right companies, this may be one of the best moments to invest in cannabis. Final Advice for Founders At the end of the day, your IP isn't just about protecting your invention. It's a signal. Companies with clear IP strategies raise more money at higher valuations. Research shows they raise up to six times more. shows It's not about filing the most patents. It's about showing that you have a coherent plan, that you're thinking long-term, and that you're serious about building a business. That's what gives investors confidence. And in today's market, trust is everything.

IP Overprotection Is Just as Risky as Underprotection, Says M&A Advisor Marcus Wolter

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