IP Rights Transfer During M&A Transactions in the UK

Mergers and acquisitions in the UK have their own characteristics. In this review, we will analyze how M&A transactions affect the transfer of intellectual property rights, as well as why it is important to conduct due diligence before making a transaction.

In the UK mergers and acquisitions, you may not transfer rights to intellectual property and technology until:

• all IP rights belonging to the target company are defined, both already registered and applications for registration;
• objections to IP ownership have been identified;
• the conditions of intellectual property licenses granted by members of the target group were checked:
• an analysis of the protection of IP rights and measures taken by the company to protect confidential information;
• agreements with former or current employees and contractors have been reviewed to assess whether a member of the task force owns all the rights to the work they have created and how confidentiality obligations are executed;
• identified IP-related disputes in which the company is involved;
• GDPR compliance was analyzed.

Carrying out due diligence is an integral part of mergers and acquisitions in the UK. This procedure includes all of the above checks.

What types of IP can be registered in the UK

Before you plan to start a merger and acquisition process in the UK, you need to make sure that all intellectual property rights also pass to you.

In the United Kingdom, you can register:

• trademarks as part of an IPO application in the UK (however, it is also possible to obtain rights to an unregistered trademark in the UK);
• IPO patents in the UK;
• design rights in an IPO application in the UK;
• domain name.

Intellectual property rights UK

There is a list of registered and unregistered intellectual property rights in the United Kingdom. For example, copyright, know-how, and other confidential information are not registrable. Some of them apply to the entire European Union, which included Britain before Brexit. These include EU trademarks and design rights.

Today, a discussion is held about the establishment of a single unitary patent, which will cover all EU countries that have ratified the Single Patent Court Agreement. It is still unknown how the UK will behave - whether it will remain a member of this system after Brexit or not.

Due diligence of IP rights

In the United Kingdom, employers will generally have rights to technologies and inventions created or discovered by their employees in the course of their work (unless agreed otherwise).

Due diligence in relation to intellectual property and technology in England, created by employees and contractors, determines the extent of their involvement in the development of the intellectual property, their location, and the conditions under which they were hired.

It’s a matter of prime importance to determine the real owner of the IP - the developers or the company. All these points should not remain unclear, so that in the future there are no inaccuracies that could complicate the transaction process.

Licensing of intellectual property rights

Under English law, a license for intellectual property or other rights may not be transferred without the consent of the licensor.

The licensor's right to assign is usually exercised without hindrance, so he may assign the intellectual property license to any third party upon prior notice to the licensee, but he does not need to obtain the licensee's consent.

Legal assistance

Intellectual property rights are a delicate issue that requires careful consideration. For their high-quality transfer in the process of concluding an M&A transaction, taking into account all legal requirements, competent legal advice is required.