IP Representations and Warranties in Asset Purchase Agreements
(Pro-Buyer, Long Form)
Summary
This template is an Intellectual Property (IP) Representations and Warranties in Asset Purchase Agreements setting out general IP representations and warranties drafted from the buyer’s perspective. Buyers in arrangements involving the transfer of IP typically require that sellers make disclosures and provide assurances regarding the validity, ownership, and protection of IP and related rights. This template includes practical guidance and drafting notes. For a more detailed discussion on transferring ownership of IP assets, see IP Asset Acquisitions. While IP representations and warranties can vary depending on unique factors (e.g., the nature of the IP involved, regulatory obligations, and industry best practices), you should consider the following issues when drafting IP representations and warranties: • Right to Use. The seller currently owns the IP or has the exclusive right to use the IP. • IP Inventory. The seller provided a complete list of all existing IP, including registrations and pending applications owned by, or licensed to the seller, used or reasonably contemplated to be used, in its business. • Maintenance of IP Rights. The seller has properly registered all of its IP and taken all other steps required by applicable law to perfect its rights in the IP. • Identify Licenses. The seller provided a complete list of all license agreements relating to the IP, whether as a licensor or a licensee. • IP Infringement. Neither the seller nor any of its products or services has infringed on the IP rights of any third party. There is no pending or threatened lawsuit, claim, action, or investigation alleging any violation of another party’s IP rights. There is no pending or threatened opposition to any IP registrations or applications. In addition, no third party, or any third-party product or service, is infringing on the IP rights of the seller. • Enforcement of IP Rights. The seller has appropriately sought, maintained, and enforced its rights against third parties. • No Encumbrances. Entering into the agreement will not conflict with or give rise to any right, license, or encumbrance relating to any IP owned or used by the seller. • Confidentiality. The seller has taken reasonable measures to maintain the confidentiality of its IP, where applicable. • Internal Assignments. All of the seller’s key employees have assigned or otherwise exclusively transferred all of their rights in the IP. • Further Assurances. The seller warrants that it will undertake all necessary steps to give effect to the transfer of its IP assets to the buyer. This template provides a starting point for drafting IP representations and warranties clauses for an asset purchase agreement and should be tailored for the specific facts and circumstances of the proposed arrangement. This template does not address representations and warranties regarding: • The transfer of software or any specific technology • Compliance with obligations required by any relevant law, regulation, or rule • Privacy and data security activities and obligations • Standards or rules required by any industry or trade organization to which the parties are members