Legal news and trends for Canadian in-house counsel and c-suite executives
Issue link: https://digital.canadianlawyermag.com/i/1181006
26 www.canadianlawyermag.com/inhouse FEATURE INTELLECTUAL PROPERTY assets can be a significant component of a company's overall value so due diligence is needed at all stages of mergers and acquisitions. Having a full understanding of the value of the IP is key so that appropriate care can be taken to uncover potential pitfalls or hidden value. A thorough examination of IP can often impact the purchase price in an acquisition or even derail a transaction entirely. Understanding exactly what constitutes IP is critical for in-house counsel, according to Harpreet Sidhu, general counsel, corporate secretary and privacy officer at Pethealth Inc. "For starters, as inhouse counsel, we need to educate ourselves on what is IP," says Sidhu. "It's not just trademarks and logos. The definition is really broad." Patents and pending patent applications, key trade secrets, tech licences, code, domain names and social media accounts all fall under IP. Involving IT, tech and marketing teams in the transaction will help to ensure that all bases are covered, as well as hiring the help of outside counsel with a specialty in IP issues, she says. "Involve all your counterparts and business teams because, once the transaction is done, it's done. You don't want to get into a dispute after the fact," says Sidhu. "Clarity is really Intellectual property in M&A Due diligence at all stages of mergers and acquisitions is key when acquiring IP and there are several pitfalls to avoid important. Clearly define what each rep and warranty is for and how to rectify it." As partner and general counsel at Valsoft Corp, David Felicissimo is regularly involved in the acquisition of software businesses, so IP is the driver of those deals. "From a legal perspective, when you're acquiring a software company, you're acquiring the IP they've built up over the years," says Felicissimo. "We're looking to see if they are the owner of any trademarks and any patents that have been filed. Have they been reviewed? Are they in good standing? Are there any infringe- ment issues?" Felicissimo and his team carefully examine any third-party licences that may be required to run the software and any open source issues that arise. As a legal advisor and former general counsel of Teva Pharmaceuticals, Ildiko Mehes has been involved in many M&A transactions of varying sizes. Patents are particularly important in pharma acquisitions, so Mehes says it is crucial to do a deep dive into any ongoing IP litigation. From a pharma perspective, she says, while due diligence is unlikely to derail a transaction, it may impact the valuation of the asset. "You want to have a very robust under- standing of the IP protection for the asset. WHAT THE EXPERTS HAVE TO SAY: JUNG-K AY CHIU PARTNER AND NATIONAL LE ADER OF PATENT S AND IP TR ANSAC TIONS AT NORTON ROSE FULBRIGHT C ANADA LLP HARPREE T SIDHU GENER AL COUNSEL , CORPOR ATE SECRE TARY AND PRIVAC Y OFFICER AT PE THE ALTH INC . DAVID FELICISSIMO PARTNER AND GENER AL COUNSEL AT VAL SOF T CORP ILDIKO MEHES LEGAL ADVISOR AND FORMER GENER AL COUNSEL OF TE VA PHARMACEUTIC AL S "It's really important to prioritize the intellectual property and get a good understanding of where the value lies in the transaction." "Involve all your counterparts and business teams because once the transaction is done, it's done. You don't want to get into a dispute after the fact." "We're looking to see if they are the owner of any trademarks and any patents that have been filed. Have they been reviewed? Are they in good standing? Are there any infringement issues?" "You want to have a very robust understanding of the IP protection for the asset. That's your way of valuing that transaction."