The Role Of Intellectual Property In Corporate Mergers And Acquisitions: Legal And Regulatory Challenges
- IJLLR Journal
- Apr 11
- 2 min read
Harish Kumar P, UG Student, Vellore Institute of Technology, Chennai
Dr. Lalith Kumar J, Assistant Professor, Vellore Institute of Technology, Chennai
ABSTRACT
Intellectual property is vital to mergers and acquisitions because, in addition to being valuable in markets, it raises complex legal issues. In the Indian context, the governing laws defining the scope of IP in M&A transactions are the Patents Act, 1970, the Trade Marks Act, 1999, and the Copyright Act, 1957, which at different levels all challenge dealmakers throughout India. Important issues are compulsory licensing on patents, trademark disputes, and intricacies related to transfer of copyright or trade secrets. The due diligence process is critical to verify ownership, validity, and liability relating to IP assets, including pending suits for infringement and unregistered trademarks. Besides, the synergized appraisal of emerging sectors by Indian regulatory forces, namely the competition commission of India and the commencement of further heights of scrutiny for IP as part of the merger process, adds additional complexity to the processes involved in M&A, especially when such an M&A involves large IP portfolios that could block competition in the market. Valuation of IP has always been very challenging due to inconsistent data and no standard methodology that complicates negotiations and post-merger integration. Cross-border mergers and acquisitions introduce another layer of complications, above all due to the differences in the legal systems and valuation practices applied to the recognition and enforcement of intellectual property rights. Notwithstanding this challenge, however, the intellectual property has the potential of providing strategic advantages in the mergers and acquisitions: adding value to the portfolio, facilitating technology transfers, and aiding diversification efforts. The challenges of legislations and regulations faced by IP in an Indian M&As would be explained in this paper.
Keywords: Cross-border, Due Diligence, Competition Law, Mergers and Acquisitions, Intellectual Property.
