Intellectual property in an acquisition: what to review
Trademarks, domain names, software and licences: how to check whether the company you are buying actually owns what it uses.
For many companies, value lies in names, products, software or content. In an acquisition, the question is simple: does the company actually own what it uses?
Check: whether the trademarks are registered in the company’s name, for which goods and services and in which territories; who owns the domain names; whether software and materials created by employees or contractors have been assigned to the company by contract; which licences the company holds from third parties and whether they survive a change of ownership; and whether there are disputes or oppositions concerning the trademarks.
Common errors: the trademark is registered in the founder’s name, not the company’s; a freelancer wrote the application without an assignment agreement; the licence terminates upon a change of control.
There are remedies for each problem identified: an assignment, a new registration, a warranty clause or a price adjustment. The earlier you find them, the less they cost.
The information in these articles is general. Your specific situation requires a review of the documents.
Alina PufuAlina Pufu is a corporate and commercial lawyer in Bucharest (sole practice: Alina Pufu Law Office). She works on commercial contracts, M&A transactions, due diligence and intellectual property.