Post M&A IP Reminders and Considerations

Brian Hall - May 4, 2017 - Business Law, Outside General Counsel Law


Congratulations, you have done your due diligence, navigated all the pre-closing activities and legalities and closed your transaction.  Now operations begin, including post-closing obligations (not to mention successful integration into your business).  One of the most important post-M&A activities relates to intellectual property (IP), including patent, trademark and copyright registrations.  In fact, this also includes pending patent, trademark and (to a lesser extent) copyright applications, both domestic and international.  So now what?

Whether you utilize your outside corporate counsel, an IP and corporate boutique law firm, in-house legal team or an IP service provider, you undoubtedly need a post-closing IP plan.  Here are some reminders and considerations that can assist your organization:

  1. List of IP – Assuming a complete and accurate IP Disclosure Schedule as part of the Agreement of Merger, Asset/Stock Purchase Agreement or other controlling document, you should have a list of IP.  Note that you should always check to ensure that no new IP has been filed for between the closing date and the commencement of post-closing efforts; recognizing that any such new filings will need to be included in your efforts.
  2. IP Recordals – Recording ownership changes, security interests and other matters with the various registering offices is likely the most time-consuming post-closing activity.  It typically encompasses several things, including potential ownership, address, Attorney of Record (AOR) and correspondent/representative changes.  Nonetheless, filings will need to be made in the United States Patent and Trademark Office (USPTO), United States Copyright Office (USCO) and any and all applicable International IP offices.  Note that recordals typically include the recording of security interests (e.g. lender’s interest as part of a credit facility, including completing supplements to perfection certificates) and are necessary to perfect a security interest.
  3. IP Docketing and Maintenance – Given all the resources expended to acquire and secure the various kinds of IP you now own, you must be mindful to effectively docket those trademarks and patents so as to be able to maintain them.  This includes making necessary filings and paying required filing fees with the appropriate governmental bodies.  Note that best practices dictate a dual-calendaring system, and oftentimes credit facilities require maintenance of IP unless certain delineated exceptions are met.
  4. IP Monitoring and Enforcement – You are not only well-served to monitor and enforce your IP, but trademark law requires policing your marks or risk potentially losing trademark rights.  Note there are numerous third party software solutions that can monitor and identify potential infringement or other unauthorized use of your IP in domain names, on social media or otherwise, which can then be analyzed by your IP counsel and acted upon, as advised.
  5. IP Monetization Strategy – Amidst all of the post-closing obligations, don’t lost sight of the fact that you want to continue to monetize your IP.  This can take many forms, such as licensing, efforts to further preclude third parties from usage or further M&A efforts.  Note that a defined IP monetization strategy plan, prepared in conjunction with your executives, branding, technical and legal team, has proven to be an effective tool.

Ultimately, post-closing activities involving intellectual property, although tedious, can be streamlined, with the goal of being efficiently completed.  Doing so will require communication between your entity and outside legal counsel.  Remember, you saw value in that merger or acquisition, so do not forget to increase that value by properly handling your IP post-closing.

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