In the UAE’s competitive business world, intellectual property plays a significant role in the success of a business. Intellectual property helps enterprises to stay competitive in the market by improving operational efficiency and brand identity. Business should secure their IP by registering it, and then it should be monitored to prevent misuse. A business may need to acquire IP to enhance the quality of its business operations. Companies should consider several things while buying IP, such as its quality and how it will benefit their business operations. Companies should make sure that the necessary due diligence is completed while acquiring IP.
IP valuation
IP valuation is necessary before acquiring the IP to determine if it will be beneficial for the business’s growth. Companies will be able to determine whether the IP justifies the investment or not and can take appropriate business decisions. IP valuation will help you assess the strength and scope of a company’s IP portfolio. You will be able to determine if the IP is worth the price and thus can negotiate the pricing.
Find out if the seller holds the legal ownership of the IP:
Make sure that the seller is the owner of the IP. While buying the IP (Trademark, Patent, Copyright), find out if it is registered with the UAE Ministry of Economy. Ownership details can be verified through official registries in the UAE. If the employee or other contractors have created the IP, then ensure that the ownership of the IP is transferred to the seller. Check if any existing licenses could limit your use of the purchased IP effectively.
Legal risks
Conduct a thorough analysis of the intellectual property portfolio to confirm ownership and validity, and identify any pending disputes such as opposition proceedings or ongoing legal claims that may compromise enforceability. Businesses should conduct a thorough review of the unregistered IP, such as trade secrets and copyrights, to determine their value and legal strength. Also, make sure that the IP is used commercially. For instance, if a registered trademark is not used for five consecutive years, then it can be cancelled for non-use. So by analysing the legal risks, businesses can protect the buyer’s investment and help to avoid unresolved legal complications.
Scope of protection for intellectual property (IP)
A registered trademark will only protect the goods and services for which it is registered. In the case of a patent, the protection extends only as far as the claims define. A composition claim, which covers the material itself, generally offers broader protection than a method claim focused on how the material is made. So buyers should carefully analyse whether the scope of protection provided by the intellectual property aligns with their commercial objectives and product strategies.
Validity of the IP
Businesses should check the validity of the registered IP and verify that the renewal fees have been paid. There are legal procedures in the UAE which allow a third party to challenge the registered IP on the basis that the IP didn’t meet the requirements. For instance, a third party can challenge the IP in case of prior rights, bad faith registration, or non-use. Make sure that you determine the validity and enforceability of the IP before purchasing it.
Ensure that the chosen IP meets your business requirements.
Before acquiring the IP, you should ensure that the IP rights align with your operational and strategic requirements. Identify if the chosen IP is relevant for your business operations and potential restrictions. For instance, if you are acquiring IP related to technology which is in its development phase, make sure that it can be commercialised and can be helpful for business growth. IP protection is territorial in the UAE, so make sure that the chosen IP is not restricted in your jurisdiction. Also, there is no cross-border protection; a trademark registered in the United States does not enjoy protection in the UAE unless it is separately registered there or extended through the Madrid Protocol.
Secure your IP with the help of Jitendra Intellectual Property.
Businesses should consider several things before acquiring an IP, such as its validity, scope of protection, and other relevant factors. Failure to perform proper IP valuation may result in legal disputes, ownership conflicts, or financial liabilities and can significantly damage the brand’s reputation. Our professionals can help you with the IP due diligence, thus preventing you from being part of unwanted legal disputes or financial loss.