In M&A, IP can be a value driver, but its intangible nature means legal and practical challenges are often only identified through a thorough review of the target’s documents and records.
This Practice Note, produced in partnership with Sakinah Sat of Des Voeux Chambers, sets out practical considerations across ownership, transfer, third-party risk, and cross-border issues that can materially impact transaction value and post-completion operations.
Key issues highlighted in the Practice Note
Verification of ownership and validity (patent, trade mark, copyright)
A key goal is to verify ownership and validity of IP said to be owned by the target. In practice, challenges often stem from incomplete or disorganised records and the different issues that can affect patents, trade marks, copyright and other IP.
Key focus points include:
-
Identify IP assets first, noting that not all IP may be documented.
-
Patents (Hong Kong example): beyond registry searches and term checks, assess whether the target owns the invention, whether it resulted from collaboration (and the underlying arrangements), and whether any assignment or transfer was valid, often requiring chain of title review.
-
Trade marks: consider registration, use, and whether the mark remains distinctive.
-
Copyright: confirm the protected category, authorship (including joint authorship), assignment/transfer, employer ownership in relevant cases, and originality.
- Freedom to operate: conduct freedom to operate analyses to assess infringement risk when using or exploiting IP, even where the IP is owned by the target.
Transfer, co-mingling/bundling, and cross-border considerations
-
Asset vs equity purchase: transaction structure impacts IP transfer and risk allocation, including administrative burden in an asset purchase and potential hidden liabilities in an equity purchase.
-
Co-mingling/bundling: complications may arise where IP is used elsewhere in the business or commercialised as a bundle with other IP not part of the deal.
-
Cross-border: as IP rights are territorial and formalities differ across jurisdictions, engaging local agents may be advisable to support due diligence and filings.
How Lexis+ Practical Guidance Hong Kong helps
The Lexis+ Practical Guidance Hong Kong Intellectual Property Module is designed to deliver clarity and practical tools tailored to real-world legal workflows, supporting teams across IP matters from protection and enforcement to commercialisation, helping move from issue-spotting to execution.
The module includes:
- Guidance on IP protection strategies across brands, designs, patents, and confidential information
- Drafting templates for IP clauses in commercial contracts
- Practice notes and forms for trade mark and patent filings
- Risk assessment tools for infringement and licensing
It also spans key topic areas such as Advertising & Marketing, IP & Corporate (including technology transfer and due diligence/IP audit), Patents, Copyright (including AI and copyright), and Trade Marks & Passing off, and more.
Complete the form below to download the full Practice Note for free and explore more expert guidance on Lexis+ Practical Guidance Hong Kong.
Note: After completing the form, the whitepaper will appear on the same page. Please stay on the page after submission. If you do not see the whitepaper, contact us at marketing.hk@lexisnexis.com for assistance.