Acquiring a Swiss company should always start with an analysis of the purchased IPR. An IPR registry can provide purchasers with information on registered rights; however, it doesn’t necessarily mean that it’s always complete & uptodate. In fact, data contained in it doesn’t necessarily indicate that some IPR are currently in use as collateral.
Purchasers may encounter other challenges, including licenses owned by 3rd parties or groups of legal entities. Proving their validity doesn’t require registering them in the aforementioned IPR registry.
Other challenges may include the use of such IPR, particularly when it comes to unregistered rights on which protection of software in the Confederation of Switzerland is based. The problem is that some software may contain adapted & integrated elements, which may lead to issues with ownership rights. Hence, concluding M&A deals in Switzerland requires performing a thorough analysis of the IPR that is going to be purchased..
Assessing IPR
Prior to initiating an M&A transaction, purchasers need to identify & make a list of rights to be bought. Purchasing a business’s shares in Switzerland doesn’t involve transferring IP rights directly; in fact, they’re transferred to a company owning them. Hence, identifying & analyzing IPR is absolutely crucial. And here’s why:
- such transactions may affect licensing rights associated with using certain IPR;
- certain IPR might not be owned by companies being bought;
- some IPR may be retained by sellers for future use.
Asset transactions involving partial sale of companies to independent 3rd parties require identifying & transferring IPR to organizations representing groups of companies. In cases like these, IPR are frequently owned by different companies & can, therefore, be sold directly. Hence, for some buyers, concluding an M&A deal in Switzerland may not make sense without purchasing IPR owned by a company to be bought.
Transferring IPR After Purchasing a Swiss Company
The most important IPR in Switzerland are TMs & patents. Both are registered, which means that their owners get protection by registering them in respective registries. Industrial designs whose main purpose is to protect a visual representation of products or their parts are less common.
The majority of businesses are inextricably linked with brand names (which may differ from the main TMs), names of domains & names of their pages on social networks. Hence, registering TMs in the Confederation of Switzerland can be an important part in the formation of a company. The said names must be registered in commercial registers maintained by Swiss cantons. Providing owners of such names with some protection, they’re deemed absolutely indispensable. Signing M&A deals in the Confederation of Switzerland is impossible without taking into account this very important aspect.
Switzerland: DD of M&A Deals
DD of IPR in the Confederation of Switzerland covers the description of IPR, as well as issues related to potential legal disputes. While listing previous & ongoing legal disputes shouldn’t be much of a problem, emerging legal claims can impact the pricing & feasibility of an M&A deal in Switzerland. Hence, performing DD will help identify & eliminate any obstacles standing in the way of buying a Swiss company.
Considering buying a company in Switzerland? Looking to transfer IPR in Switzerland? Need advice on IPR regulation in Switzerland? Why not contact IQ Decision UK?
