Topic: Intellectual property

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Registering and discharging intellectual property security interests

Intellectual property often forms an important part of a target’s assets, especially for start-ups and high-tech companies. It is important for both the purchaser and the vendor to understand the security registration and discharge process in intellectual property assets.

Registration

Pursuant to the provincial Personal Property Security Acts, Intellectual property is considered a type of intangible personal property, and as previously noted in order to perfect a security interest in such intangible property, a secured party must register its security interest at the appropriate personal property security registry in the jurisdiction where the debtor is located .

In addition, a … Continue Reading

IP representations and warranties in tech M&A

When negotiating an M&A deal involving a technology company, parties need to pay particular importance to the representations and warranties regarding the target company’s intellectual property (IP). In a recent Forbes article, “18 Key Issues in Negotiating Merger and Acquisition Agreements for Technology Companies”, Richard Harroch addressed some of the standard issues that come with every deal, such as specific provisions regarding consideration, escrow and holdback periods and representations and warranties regarding financial position of the target company, but also highlighted the importance of careful negotiations relating to the IP of the target company. To facilitate a smooth … Continue Reading

Protecting trade secrets in M&A

Trade secrets and confidential information are a cornerstone to most successful intellectual property strategies.  Trade secrets provide important competitive advantages that augment the profitability and value of a business.  The importance and value of trade secrets have been recently confirmed by substantial damage awards, broad enforcement and the introduction of specific legislative protection in the United States.

In the M&A context, particularly during the negotiation and due diligence phases of an M&A transaction, the disclosure of trade secrets and confidential information can expose the disclosing party to various risks. As such, taking measures to protect confidential information must be a … Continue Reading

Private equity trends towards specialization

Competition has increased in the private equity (PE) market. In the US, PE firms paid a 31% premium for acquisitions in 2016, an eight-year high according to Bloomberg data. There are a growing number of market participants chasing after ever scarcer quality businesses thereby causing price appreciation of businesses. In addition, the availability of low interest debt provides players with the financing to pursue these assets.

A competitive advantage

To remain competitive, there is a growing sentiment that PE firms should look to specialize, which many have already been doing. It can be difficult for PE firms … Continue Reading

Intellectual property considerations in M&A

The acquisition of a business, whether via the purchase of either its shares or its assets, often involves the transfer of intellectual property. Generally, in the former scenario, the transfer of IP is by operation of law, whereas in the latter case, the specific intellectual property rights subject to the transfer are specifically detailed, usually in a schedule to the purchase agreement governing the deal. In either case, careful attention must be paid to the IP during the diligence phase in order to effectively capitalize on the full value of the IP’s intangible rights.

Below is a non-exhaustive list of  … Continue Reading

Tips for early stage companies and thinking ahead to an exit

It is trite to point out that an early stage company faces a difficult balancing act in weighing the costs of “overhead” against its operational capital needs. At the very beginning, there is often very little cash on hand, and its allocation is not up to much debate, as the saying “keeping the lights on” can prove to be quite literal in the circumstances. As the company moves along its life cycle, it may gain some attention from angel investors, and spending questions will become a bit more difficult. Legal costs are often a painful experience for a start-up that … Continue Reading

IP due diligence: beyond the usual suspects

Conducting a due diligence review of intellectual property (IP) matters as part of a merger or acquisition has become commonplace with the growing importance of commercial IP.  While most lawyers are aware of a general need to protect the more popular forms of intellectual property (patents, copyrights and trademarks) in the course of a transaction, there are a number of specific nuances that should be taken into careful consideration to avoid potentially painful missteps.

Intellectual property rights are intangible rights having no physical characteristics, and are established through the legal frameworks that they operate under. Accordingly, IP rights … Continue Reading

The hazards of intellectual property issues in employment agreements

 

This blog post was co-written with Brian Chau, an Associate in Norton Rose Fulbright’s Toronto office.  

Businesses of all sizes are increasingly becoming aware of the strategic and commercial value of intellectual property (IP). Startups which are just getting off their feet; scaling businesses which are growing in both revenue and size; and mature, sophisticated ventures which have established positions in their respective markets all recognize that their IP and technology may be used for a variety of reasons, including: 

  • to attract investment or financing;
  • to be used as collateral for debt financing;
  • to obtain a
Continue Reading

Business-related patents

This post was contributed by Matthew Marquardt, Partner, Norton Rose Canada LLP and Laura Johnson, Associate, Norton Rose Canada LLP

“Business method” patents remain a hot topic in business and legal circles, yet are still too often overlooked – particularly in contexts such as M&A.

As recently as 2011, the Federal Court of Appeal in Canada affirmed that business methods are patentable, quashing the rejection by the Commissioner of Patents of the now infamous Amazon.com ‘one-click’ patent on the basis that the claimed invention was a business method – and therefore not patentable subject matter.  Although that decision, … Continue Reading

Apple’s legal win could lead to increased smartphone M&A

A jury ruling in Apple’s favour over Samsung in the US District Court earlier this week could have a chilling effect on rivals, leaving them scrambling for alternatives to common touch-screen gestures used in many smartphones today.

The awarded $1.05 billion has affected Samsung’s stock price, and may limit its access to the coveted US marketplace. While Samsung will appeal, Apple indicated it will seek an injunction against the Korean tech giant to further its market share.

Samsung will not suffer alone.… Continue Reading

Acquiring patent portfolios of failed or failing technology companies

This post was contributed by Mark Sajewycz, Partner, Norton Rose Canada LLP

The market has recently begun to better appreciate the value of patents, particularly after Rockstar Bidco, LP, a consortium comprising tech giants Apple, Microsoft, RIM, EMCand Ericsson, acquired Nortel’s patents for the staggering sum of $4.5 billion.

Recent innovations in the computer and wireless technology sectors have focused on creating the next disruptive technology.  Many companies developing these technologies are at a fairly early stage and fuelled by private investment and government funding.

Unfortunately, this funding is drying up, leaving these businesses vulnerable to failure.  As with … Continue Reading

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