In a merger or acquisition, intellectual property is an important asset that plays a significant role in determining the value of a business. Intellectual property includes things like a business’s trademarks, copyrights, patents and trade secrets.
Businesses must handle intellectual property with care during a merger or acquisition to ensure legal compliance and to protect the value of these assets.
Transferring intellectual property
During a merger or acquisition, intellectual property ownership may transfer as part of the deal. The agreement between the companies usually outlines how these assets will transfer. This property might remain with the original owner, transfer to the new company or divide between them in some way. Proper valuation of intellectual property is important during this process. If the parties fail to accurately assess the worth of intellectual property, the transaction could lose some financial worth.
Reviewing intellectual property agreements
Intellectual property agreements, such as licenses or contracts with third parties, require careful review during a transaction. Some contracts may restrict or prevent the transfer of intellectual property rights. For example, a licensing agreement might contain provisions that limit the ability of the new company to use the IP after the merger. In this case, the companies must either renegotiate these terms or risk losing access to important intellectual property.
Navigating trade secrets
Ohio law protects trade secrets, but maintaining that protection requires keeping the information confidential. During a merger or acquisition, trade secrets may risk exposure if proper precautions are not taken. The companies involved must establish safeguards to prevent the loss of these valuable assets.
Business leaders must keep in mind that intellectual property disputes may arise during the merger process. If ownership of a trademark or patent is unclear, it could lead to legal conflicts that delay the transaction. To avoid such issues, companies should ensure that intellectual property rights are clearly defined and documented throughout the restructuring process.