Every day, companies are bought and sold because of the value of their intellectual property and IP assets. There is hardly an M&A transaction out there that doesn't raise an IP issue, even if the target does not own a patent or a trademark. Whether it's software, a technology agreement or stored customer data, it is always important to identify and determine the true value of assets in order to transfer them legally and bring the most value to all parties out of a transaction. Following are slides from a webinar hosted by an experienced panel of experts from Silicon Valley on Tuesday, June 23rd, 2020 at 10:00 am PDT. We discussed and shared war stories from many years of practice both from the position of buyer and seller, as well as an insurer who specializes in transactional insurance to cover risk and bridge gaps.

1. STRUCTURING
IP AND
TECHNOLOGY
ACQUISITIONS
June 23rd, 2020

2. Louis Lehot
Founder
Adam Dolinko
EVP
Patrick Stroth
President & CEO
PANELISTS
Natasha Allen
Founding Partner

3. AGENDA
1. Transaction Structure
2. Due Diligence
3. Representations, Warranties and Indemnities
4. Red Flag (or Potential Red Flag) Issues

4. TRANSACTION
STRUCTURE
• Common deal structures
• Stock purchase/merger
• Asset
• Benefits and disadvantages
of each structure from an IP
perspective
• Role of ancillary agreement
• Transition services agreeme
• Licenses

5. DUE
DILIGENCE
• Differing approaches
based on deal structure
and timing
• Technology due
diligence and the role of
consultants

6. REPRESENTATIO
NS, WARRANTIES
AND INDEMNITIES
• The role of sufficiency
• Knowledge qualifiers and
materiality
• IP as a fundamental rep
• The emerging role of rep
and warranty insurance

7. RED FLAG
ISSUE:
IP OWNERSHIP
• Founders
• Effective assignments
• Employees
• Taint of prior employers
• Missing PIIAs
• Professors
• Claims by universities
• Consultants/contractors
• Effective assignments
• Remediation through
confirmatory assignments as a
condition to closing
• Joint ownership

8. RED FLAG
ISSUE:
OPEN SOURCE
• Level of diligence
• Reviewing risk of taint
• Ensuring open source
compliance
• Remediation and cost
relative to deal value

9. RED FLAG
ISSUE: KEY
LICENSES AND
AGREEMENTS
• Materiality based on revenue
• Ensuring assignment of large
revenue contracts
• Materiality based on business
• Ensuring assignment of key
technology agreements
• Avoiding patent leakage
• Understanding material
upstream obligations
• Third-party licenses with ongoing
payments

10. RESEARCH
YOUR
POTENTIAL
BUYERS
• WHO IS DOING
WELL?
• WHO IS DOING
POORLY?
• WHO HAS A GAP IN
THEIR PORTFOLIO?

11. APPLYING BEST PRACTICES
TO HYPOTHETICALS

12. HYPO I
Diligence reveals Target
has distributed GPL v2
code compiled with key
Target proprietary code
and not in compliance
with GPL agreement

13. HYPO II
Target’s patent license
with Buyer competitor
seemingly sweeps in
Buyer’s patent portfolio

14. HYPO III Key IP is in-licensed from
founders

15. HYPO IV
Target jointly owns with
the developer source
code to main product and
has failed to disclaim
duty to account

16. HYPO V
Target counsel insists on
qualifying fundamental
reps (like title) with
materiality and knowledge
qualifiers

17. HYPO VI
Due to COVID-19, Target
is challenged in making
payments as they come
due, has significant past
due obligations, and there
are real questions about
its ability to continue as a
going concern.

18. CONCLUSION
• Anticipate issues before
they arise
• Seek practical solutions
• Keep big picture in mind

19. Louis Lehot
Founder
Adam Dolinko
EVP
Patrick Stroth
President & CEO
Q&A
Natasha Allen
Founding Partner

20. Louis Lehot
Founder
l2counsel.com
louis.lehot@l2counsel.com
THANK YOU!
For More Information:
Natasha Allen
Founding Partner
allenhatcher.com
natasha@allenhatcher.com
Patrick Stroth
President & CEO
rubiconins.com
pstroth@rubiconins.com
Adam Dolinko
EVP
nextjuris.com
adam@nextjuris.com