How to effectively deal with intellectual property challenges in corporate mergers and acquisitions?

Mergers and acquisitions bring many challenges to both buyers and sellers, especially when it comes to intellectual property issues. The value of intellectual property assets often becomes a decisive factor in whether a deal can be completed, and preparing for possible M&A issues in advance will help simplify the process for both parties.

During the M&A process, missing documents and errors in IP ownership data can significantly affect the success of the M&A process and the value of the IP portfolio. Through effective planning and resource allocation, buyers and sellers can foresee potential M&A issues in advance and prepare accordingly.

Acquisition, preparation and collection of documents

• One of the most common issues in M&A is gathering the documentation required to evaluate and reallocate IP assets. In order to obtain an accurate IP portfolio valuation during the due diligence phase, the seller will need to provide a comprehensive set of documentation, including patents and patent applications, trademarks and service marks, trade secrets and proprietary information, licensing agreements between the seller and third parties, contracts and agreements regarding IP assets, documentation of any IP litigation claims, and domain names.
• The more complete the due diligence documentation provided to the buyer, the more attractive the deal. Ideally, the seller would maintain an up-to-date IP portfolio containing all necessary documentation. However, since this is rarely the case, it is more advantageous for both the buyer and seller to conduct due diligence in advance and allow sufficient time to collect the necessary documentation.
• In order to record the change in ownership after a merger, the buyer must have the relevant documentation on hand, including all relevant transfer deeds and powers of attorney.

Managing the transfer of intellectual property assets

• There can be many challenges in the IP transfer process due to differing deadlines, documentation, and translation requirements from country to country, so advance planning is critical to success.
• Some countries require that changes in ownership be recorded within a certain time frame after an asset is transferred, and missing these deadlines can have serious consequences for your assets, including exposing you to the risk of losing related rights. Similarly, some countries require that changes in ownership of "similar trademarks" resulting from mergers and acquisitions must be filed at the same time and cannot be done in stages, so it is critical to understand the requirements of different countries and deal with them according to priority.
• Cost management is also key, as having documents translated and/or legalized in each jurisdiction can be cumbersome and expensive. While these costs cannot be avoided, it is important to factor them in at the outset of the project, as failure to do so could eat up a large portion of your budget.

Expert support

• Working with a professional partner can help companies avoid many common M&A issues and potential pitfalls, reducing time, money and risk when transferring intangible assets.
• An experienced partner can ensure nothing important is missed, alleviating the workload on your internal team while leveraging their expertise and network to help you manage the transition.