Merger conceptWhen two businesses merge, or one acquires the other, many concerns arise over the intellectual property holdings each possesses. Particularly when one or both of the companies involved is privately owned, a significant amount of due diligence is recommended before a merger or acquisition is finalized. Here is a brief overview of typical concerns and tasks relating to intellectual property in an acquisition or merger. Contact us at Brown Patent Law with additional questions.
IP Documentation
Before acquiring a company, you should have reviewed a complete list of any intellectual property owned by that company. This can include a wide variety of material. Patents and patent applications should appear on this list along with the specific patent numbers, registration and issue dates and other specifics. Additionally, trademarks and service marks, trade secrets and proprietary know-how, technology licenses, both from the company being acquired to third parties, and to the company from other sources, software and databases, domain names, social media accounts, and much more should appear on the list. This typically appears as a virtual inventory of valuable IP assets.
Verification of IP Ownership
Whether you’re merging with another company, or acquiring them, it’s important to know that any intellectual property that’s critical to its current or future operations is owned by that company. In some cases, they may have acquired the right to use certain intellectual property, which is also acceptable. In other cases, however, you may find issues related to key IP, which could influence the value of one company, or even the viability of a merger or acquisition. Experienced IP counsel is needed to help navigate common issues like jointly developed IP, or similar issues that could result in the rights connected to currently used intellectual property changing after a merger or acquisition. Additionally, documents assigning ownership of intellectual property developed by employees may be needed.
Investigation of Past IP Disputes
In addition to reviewing currently owned intellectual property itself, it’s also important ahead of an acquisition or merger to review IP-related disputes a company has been involved in previously. This investigation will reveal any vulnerabilities or exposure to IP claims, as well as illustrate how willing a company has been to enforce its rights. Any unresolved claims, and the terms of settlements could necessitate special indemnity for the acquiring business.
Websites and Social Media
Not only do a company’s web holdings and social media profiles fall under the protection of IP laws, they can also be an important and valuable part of a business’s operations. In order to verify that these important tools are properly protected and available after a merger or acquisition, it’s important to ensure that any domain names for websites are registered to the proper company. Also, the company’s stated Privacy Policy should be followed, and they should be compliant with it. Social media accounts can introduce further complications because they’re often registered in the name of an employee, rather than the company itself. There are also concerns over the ownership of content posted both to social media, and to the website.
This is far from an exhaustive list of the concerns related to intellectual property when you acquire or merge with another company. To learn more, or for answers to any other questions you have about intellectual property within your business, contact us at Brown Pate