Importance of IP Rights in merger and acquisition of companies in UAE

Intellectual property (IP) includes inventions, artistic creations, literary works, designs, symbols, logos, taglines and brand names that are products of the mind and intellect, and serve as intangible assets to a company or organization. So, it is really essential for writers, artists, designers, entrepreneurs, industrialists, business organizations or researchers to protect their innovative works by registering their IP rights.

The different means to safeguard your intellectual property rights are copyrights, trademark, patents and industrial designs registration that allow you to earn protection, trust, business profit and much more by asserting your identity over the intangible asset.

How IP rights influence mergers and acquisitions?

Laws associated with Intellectual property in UAE present great challenges to businessmen and entrepreneurs when it comes to merger and acquisition of companies. The value of IP assets shall be a deciding element in such transactions and it is necessary to understand the exact value of intangible assets related to the company. In order to effectively tackle the issues coming up in such transactions we need adequate knowledge and effective planning of experienced hands. Following the below three ’S’ strategy will help you to make the transaction more trustworthy.

Sharing IP documents

A major issue that should be dealt with utmost importance during mergers and acquisitions is the sharing of all documents pertaining to IP rights. It will include trademarks, copyrights, patents, domain names, valid licenses between the seller and third parties, documents corresponding to any IP litigation claims and other agreements related to IP rights. This will add a lot more trust, value and validity to the transaction. But, most of the companies don’t maintain an up-to-date record of their IP rights documents. So, the buyer [acquirer] and seller [acquire / target company] should make sure that all the IP records of the company are well maintained during the early stages of the transaction, so as to get sufficient time to procure the missing documents.

Securing IP ownership

During the transaction, a detailed verification of the ownership claims should be made so that both the seller [acquirer] and buyer [acquire / target company] can remain safe from misrepresentation of claims at a later stage. The buyer should make sure that the ownership of IP assets belong to the seller and not any third parties. In case, they have licensed the IP assets to some third parties, that license also should be shared at the time of transaction. Apart from that, the seller also must ensure that all the ownership claims are transferred successfully to the buyer so that no claims or complaints can be made against him, in case of any issues arising after the sale.

Settling IP disputes

In the case of the seller having some potential disputes, pending cases or unresolved issues relating to intellectual property in UAE, those details must be clearly stated during the transaction. Such disputes can possess a financial risk to the buyer along with loss of reputation. A post-closing agreement is usually made between the seller and buyer in such circumstances to reduce the financial burden on the part of the buyer after the transaction. It needs in-depth knowledge on the part of the buyer to understand the potential impact of the IP claims, and also to take necessary actions to mitigate future risks involved in the transaction. So, both parties should clearly assess these IP claims and issues and settle them before signing the acquisition agreement.

IP Consultants in UAE

Intellectual property rights help you a great deal in safeguarding your ideas from being exploited by others. Still, many people are unaware of their IP rights. Laws dealing with Intellectual property in UAE may seem highly complicated for an ordinary person to understand. Therefore, it is always advisable to seek advice from a qualified IP professional in UAE during a merger or acquisition, so that you can effectively handle all queries and conflicts that may arise during the transaction.

At Axiom Mark, we have a team of lawyers experienced in all matters related to IP rights in UAE who will help you to easily navigate any issues, conflicts or queries that may occur during a merger or acquisition. As the best legal consultants in UAE, we have earned a decade of trust in taking our clients to a safe shore. Contact us any time for consultation and assistance in IP rights in UAE.