How can foreign companies protect their intellectual property during an M&A in India?

To protect your intellectual property (IP) during mergers and acquisitions (M&A) in India, foreign companies should follow several key steps:

• Thorough Due Diligence: Conduct a detailed assessment of the target company’s IP assets, including patents, trademarks, copyrights and trade secrets. This involves verifying the validity, ownership and scope of these assets to ensure there are no hidden risks or liabilities​.
• IP Registration: Ensure that all IP rights are properly registered and current with the Indian authorities. This includes patents and trademarks registered with the Office of Controller General of Patents, Designs, and TradeMarks. Registered IP provides stronger protection and is easier to enforce​​.
• Clear Contractual Agreements: Draft comprehensive contracts that clearly define the ownership, usage rights, and transfer mechanisms of IP. These agreements should specify the handling of IP post-acquisition, including licensing and protection of trade secrets. Consulting a merger and acquisition lawyer can ensure these contracts are robust and enforceable​.
• Compliance with Indian Laws: Ensure the M&A complies with Indian IP laws, including the Companies Act, 2013, and the Competition Act, 2002. Adherence to the Foreign Exchange Management Act (FEMA) is also crucial for foreign investments​​.
• Engage Local Legal Experts: Given the complexity of Indian IP laws, engaging local legal experts, particularly those experienced in M&A, is essential. A knowledgeable merger and acquisition lawyer can navigate the legal landscape and ensure compliance with regulatory requirements​.