BFS’17 Legal Lab for Funding Session
Sometimes companies fail to understand the importance of Intellectual Property (IP) to the Company’s Value. In the fourth session, the discussion was about how companies protect their IP and the risks of not doing it. The session was kindly sponsored and hosted by Thomas Prock – Partner and Solicitor at Marks & Clerk (M&C) and Simon Portman – Managing Associate and Solicitor at Marks & Clerk.
The global economic environment has changed during the past years. The way investors valuate companies is not the same as it was a few years ago, where sales and tangible assets were the most important factors in firms’ valuation. In the knowledge economy of today, a company’s intangible assets, such as IP, became key factors of its worth. For Thomas, IP can contribute up to 80% of a Company’s Value. IP represents a big utility in the business context, for example, IP rights represent a barrier to market entry (but if it belongs to other parties it may work against you).
Some examples of IP are patents, design rights, brand, copyright in the website code or database. The most common contracts pitfalls are not having a contract; contracts with illegal or unenforceable provisions; it is subject to foreign law and jurisdiction or it bears no relation to reality.
M&C advised to have a plan for IP and to stick with it, define polices as part of your plan, create an IP budget if your company value is influenced by IP and do not ever disclose your inventions before talking to a patent attorney.
The final instruction were to not rely on the warranties but do your own due diligence and If you are the target company beware of “change of control” clauses in contracts.
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Learn more about Marks&Clerk:
Marks & Clerk is recognised as one of the world’s leading specialists in intellectual property. A global network with over 800 people worldwide, it advises clients in a full range of sectors in all aspects of intellectual property – patents, trade marks, designs and copyright.