Technology Acquisition in M&A Transactions

Description

Much of the value of a target company often resides in the technology and IP rights assets owned by the company. M&A counsel must have a thorough understanding of the laws and common industry practices regarding the development, acquisition, and licensing of those assets.

Due diligence will include confirming the status, chain-of-title, expiration date, and record ownership of registered IP assets (such as patents, registered trademarks, and registered copyrights). Due diligence will also include a review of key technology and IP-related agreements, including invention assignment agreements, inbound and outbound license agreements, and key customer and supplier agreements. AI systems may be capable of producing complex and innovative products and services--it may become necessary to consider how inventorship and authorship will be determined. Automated scans of source code for open source and security issues are common.

Buyers may require extensive IP representations and warranties relating to the technology being transferred and may impose pre-closing conditions to address problems discovered during due diligence. The parties may also include specific indemnities for matters that were disclosed in due diligence. Depending on the structure of a given deal, additional agreements relating to the transfer of IP, granting of IP licenses, and transition services agreements may be required for the transaction.

Listen as our authoritative panel discusses these and other issues that M&A counsel must consider when undertaking a transaction involving the acquisition of technology assets or a technology-focused company.