I D E N T I F Y I N G A N D M I T I G AT I N G P O T E N T I A L I P I S S U E S 7
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Who owns the rights to your software and other IP? The answer is likely not be as straightforward as you may initially think.
• What data sources exist – and are needed? Data, data sources, and data processing may need to be aligned with a telecoms’ existing framework – in part to avoid potential regulatory risks. During a negotiation process, a telecoms will likely request copies of all material license agreements and all other IP-related agreements. Be aware that such documents may include the likes of R&D agreements, strategic partnerships, and joint venture agreements. A potential buyer may seek to have technical experts to review your IP, code, and solutions early on during negotiations. As is the case for legal matters pertaining to IP, you may want such experts to be independent to provide insight without bias.
ensure that they are purchasing IP, associated rights, and software solutions free of future extra charges or litigation risks. Addressing such areas can start by asking yourself questions such as: • Is my software created from scratch?Often, software builds on existing libraries of code, or rely on third- party solutions. Such dependencies may lead to IP issues after an acquisition. • Who assisted in the creation of the IP and what are their rights? Consultants, external experts, and independent contractors may have been engaged in developing the IP and potentially hold contractual rights pertaining to the use of or sale of the IP. • Is my software dependent on other solutions? The answer will often be yes. Possible IP dependency should be explored, and exposure mitigated.
Your products and services areoftenthemain reasonwhy a telecoms is interested in purchasing your company. Behind your software products lies much work, code and potential pitfalls which must be addressed during M&A negotiations. That is doubly true for your intellectual property (IP) and what rights will be – and can be - transferred to the acquirer upon agreement Valuation of IPwill play a pivotal role in anM&A process. Calculating it includes looking at revenue generation, anticipated revenues, royalty earnings and license fees (payable or receivable) and expected benefits for the acquirer – both now and in future. Other areas that will be considered include IP-related patents, patent applications, trademarks, and certification marks. Your software and IP will be focal points during due diligence. A telecoms – as any buyer – is looking to
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