IP Representations and Warranties in Tech M&A

When negotiating an M&A deal involving a technology company, parties need to pay particular importance to the representations and warranties regarding the target company's intellectual property (IP). In a recent Forbes article, "18 Key Issues in Negotiating Merger and Acquisition Agreements for Technology Companies", Richard Harroch addressed some of the standard issues that come with every deal, such as specific provisions regarding consideration, escrow and holdback periods and representations and warranties regarding financial position of the target company, but also highlighted the importance of careful negotiations relating to the IP of the target company. To facilitate a smooth negotiation period, sellers should familiarize themselves with both the types of clauses buyers typically request, and buyers' rationale for wanting those clauses in a purchase agreement.