Vietnam: Mitigating Risks - When acquiring spun-off intellectual properties

In brief

Intellectual property (IP) spinoffs have become a common method of knowledge transfer, offering several advantages. These include helping companies develop a focused and coherent IP strategy, separating from the potential baggage of the previous IP owner, and leveraging their corporate edge to improve emerging technologies created by others. However, it is crucial for companies acquiring these IPs to conduct thorough due diligence and be aware of the legal risks involved in the acquisition process.

From the perspective of the acquiring company, it is essential to ensure a smooth, encumbrance-free transition of IP assets from the original parent company to the spinoff entity (SpinCo). Additionally, it is important to confirm that SpinCo’s future ownership and use of these IPs will not face any disputes or challenges. To that end, the following issues should be taken into consideration. Different types of IP require different treatments due to their unique ownership establishment and protection mechanisms. Therefore, the scope of the spinoff must be clearly delineated to avoid disputes related to co-ownership, coexistence, or concurrent use.


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