IP issues to consider in share purchase contracts
IP issues to consider in share purchase contracts

The following IP guidance note provides comprehensive and up to date legal information covering:

  • IP issues to consider in share purchase contracts
  • Share purchase or asset purchase?
  • Key stages in a share purchase
  • Due diligence
  • Shared IP
  • Warranties, indemnities and disclosure
  • Quick list—key IP issues when buying shares

This Practice Note focuses on the intellectual property (IP) rights aspects of share purchase transactions, alongside some more general issues that commonly arise in the context of a share purchase. This has been approached mainly from the buyer's perspective, but also flags some concerns for the seller where relevant. For a detailed checklist of issues, see: Share purchase transactions—IP issues—checklist.

This Practice Note raises issues that are pertinent to the purchase of shares in a company that has some valuable IP assets, rather than the acquisition of shares in a technology, software or web-based company (for which IP is at the core of its business, and would require a more comprehensive series of IP-specific enquiries and protections).

Share purchase or asset purchase?

In many respects the process and issues to consider will be the same no matter whether shares or assets are being acquired. There are some important differences, which are flagged, where relevant, below.

In basic terms, a share purchase involves the shares in a company being acquired from the ‘individual shareholders’ who own those shares. In contrast, in an asset purchase, particular assets are bought from ‘the company’ itself as owner of those assets. The fundamental factors that will influence whether an acquisition will be structured as a share purchase or an asset purchase include:

  1. the nature and quantity of