Merger and acquisition
Given the importance of both volume and financial aspects that intellectual property rights represent in a company, it is critical to understand how IPRs are involved in mergers and acquisitions.
Often, critical deadlines and workload related to an acquisition or merger transaction can prevent a business considering the global affect. It is therefore necessary to be informed in advance of risks and opportunities related to IP during these transactions.
During a merger or acquisition, the assets of a company must be taken into account, including intangible assets. These intangible assets are largely formed by conventional IP assets such as patents, trademarks, designs, copyrights, know-how and trade secrets. It is important to see the transfer of intellectual property as an essential part of a larger transaction, which is not just limited to the transfer of intellectual property rights in themselves.
Writing an Acquisition Agreement details the terms and conditions under which the purchase of shares or the sale of assets will be made. In the case of intellectual property, the seller will usually be asked to make declarations and provide guarantees on intangible assets to be sold. Indeed, it is essential to check some points such as:
- Rights validity (patent, design etc)
- Well-made fillings (choice of classes for brands, protection in the relevant countries, priority period etc.)
- Rights holder (legal owner)
- Expiry date
In operations where IP assets are used in both the transferred business and the business that the seller retains, it is possible that licensing will be required between the buyer and seller activity.
In order to properly take into account intangible assets within the company, a valuation of these IP assets is required.