Mergers and acquisitions present many challenges to a buyer and a seller, particularly when it comes to intellectual property issues. The value of IP assets can be the deciding factor for whether the transaction will take place or not. As the perception of IP assets continues to evolve, more specific requirements may significantly impact the ease of the process as well as the asset value. With effective planning and resources, the buyer and seller can anticipate these issues and prepare accordingly.
1. Sourcing, Preparing and Collecting Documentation
The seller needs to provide a comprehensive set of documentation, including patents and patent applications, trademarks and service marks, trade secrets and proprietary information, licenses between the seller and third parties, contracts and agreements regarding the IP assets, documentation for any IP litigation claims and domain names. Make sure your documentation is up to date
2. Intellectual Property Ownership
When a seller claims ownership of an IP asset, they will need to provide representations and warranties to the buyer in the assignment agreement. In mergers and acquisitions, this can cause issues if the seller has misrepresented their ownership of an IP asset.
3. Open or Potential IP Disputes
A detailed review of open or potential disputes is necessary in case of intellectual property issues that may have a significant financial impact to the buyer and/or seller following a transfer agreement. The buyer will seek to discover and resolved, unresolved or potential claims and limit obligations to those claims.
4. Disclosure Schedules
Mergers and acquisitions can be relatively quick transactions for a number of reasons. Once a potential sale becomes public knowledge, it can have a negative impact on both the buyer and the seller. In order to facilitate a speedy sale, the buyer will provide a disclosure schedule to the seller, outlining the key disclosures he has to provide within a given timeframe. This is a complex and detailed document that, if not completed correctly, can cause intellectual property issues during and after a sale.