July/August 2009 / Features
What To Consider in an International Intellectual Property Purchase
Economic trends, including a growing need for geographic diversification and easier access to financing in emerging nations, have made purchase of intellectual property an increasingly important business strategy, but companies need to be aware of potential pitfalls. They include unfamiliar contract rules, shifting and in some cases politicized regulations, and unfamiliar ways of negotiating and doing business. A country’s legal system “may favor outside investors, but then due to any number of factors, the ground rules could change mid-deal to strictly protect the country’s internal businesses,” the author writes. “As a general rule, expect the unexpected.”
Companies need “flexibility” regarding business practices, but also need to insure that employees at all levels of the company are thoroughly versed in the Foreign Corrupt Practices Act.
Anticipating future disputes is especially important in international IP deals, the author writes. “Ask for clarification or any needed additional information regarding, for example, the transferability of the target’s intellectual property, as well as the gaps in the target’s intellectual property protection,” he says. “In the end, you do not want to end up in a foreign jurisdiction with an intellectual property dispute.” The author recommends intense due diligence in these deals, and the inclusion of an arbitration clause.
