Managing IP Infringement Risks To Avoid Legal Exit Issues

When it comes to exit strategies, unresolved IP infringement issues can transform a promising deal into a costly nightmare. The multi-year Moderna vs. Pfizer and BioNTech dispute over mRNA vaccine technology is a strong example and has been creating complications for all three parties' strategic positioning and valuations. In fact, in a win for Moderna this past May, the European Patent Office upheld the validity of one of the company's key patents—a move which saw Moderna's U.S. stock price increase by 0.52% at the time, while shares of Pfizer and BioNTech dropped 1.14% and 0.67%, respectively.

While such disputes are never ideal, they can prove particularly challenging for companies eyeing an exit. IP infringement risks can fundamentally impact deal valuations, timelines and post-closing liability. Over the past two years, 30% of major M&A deals have faced significant delays—a figure that has increased from 15% in 2020. And from my observations, many of these