The Lexpert Special Editions profiles selected Lexpert-ranked lawyers whose focus is in Corporate, Infrastructure, Energy and Litigation law and relevant practices. It also includes feature articles on legal aspects of Canadian business issues.
Issue link: https://digital.carswellmedia.com/i/133445
d fey d d s, er at at at n, at he sn d sre he re ce ue VALUING INTELLECTUAL PROPERTY 29 diligence, essentially front-ending it, or you can cover the deal with representations and warranties so that if you find the IP [that] you thought was there isn't, you don't have to close the deal," he says. But the latter opinion is a "lousy remedy," says Barnes, especially if it involves public companies, given the media coverage and social media chatter that surrounds high-profile M&A activity. Then there's the danger that "momentum will carry a transaction through," he adds, "that might not have proceeded had the IP due diligence been front-ended, or certainly, a much different price would have been bid." The dynamic nature of technology can make valuing technology difficult, says Chris Hewat, a partner in the M&A practice in Toronto with Blake, Cassels & Graydon LLP. "The value that's there today is not necessarily going to be there tomorrow. So if you're looking at an M&A where IP is the lifeblood of the business, it magnifies the risk." He sees the strategic use of IP as a driver spurring an increasing number of M&A deals as companies look to build up their IP portfolios for both offensive and defensive purposes. Companies have also recognized that their IP portfolio might have much broader uses and value than it currently does. More and more M&A activity is being undertaken to attain the target's IP, driving up valuations of IP portfolios, Hewat says. Aggressive acquisition and litigation activity by non-performing (patent-assertion) entities is not only taking up target companies' time and resources, but is also fuelling growth in valuations. As an indication of the increased focus on patent portfolios, Hewat notes that "Apple and Google were reported last year as having spent more on patent purchases and litigation than on research and development." As a consequence of the recognition that patents often have limited time value, with new technology eclipsing patented technology, Hewat sees a trend toward a more rational environment that includes more cross-licensing and a reduction on the litigation focus. Norton Rose's Singer says as companies become more proactive in prosecuting their competitors based on claims of infringement, this type of activity "is starting to move out from the truly high-tech industries into some of the more traditional industries." He predicts "we're going to start seeing this type of aggressive prosecution in sectors such as financial services and natural resources industries. A lot of companies are now "ONE OF THE CHALLENGES IN VALUING A TARGET'S IP PORTFOLIO IS THAT TECHNOLOGY EVOLVES SO VERY QUICKLY, IN SOME CASES IT CAN BE CHALLENGING TO VALUE THE IP" . Pincus, Stephen N. Pletcher, Fred R. Pukier, Brian M. Raizenne, Robert Raymond, Paul Raymond, Pierre A. m Goodmans LLP (416) 597-4104 spincus@goodmans.ca Borden Ladner Gervais LLP (604) 640-4245 fpletcher@blg.com Stikeman Elliott LLP (416) 869-5567 bpukier@stikeman.com Osler, Hoskin & Harcourt LLP (514) 904-5626 rraizenne@osler.com Stikeman Elliott LLP (514) 397-3061 praymond@ stikeman.com s, ors he BC, . Mr. Pincus heads Goodmans' REITs & Income Securities Group, and has an extensive corporate, M&A and private-equity practice. He has played a leading role in developing Canada's IPO sector, real estate capital markets and seniors housing industry. Norton Rose Canada LLP (514) 847-4479 paul.raymond@ nortonrose.com ROB.indd 29 Mr. Pletcher advises on all aspects of corporate finance, M&A, commercial transactions, corporate governance and continuous disclosure, with a strong focus on public companies in the domestic and international mining industry. Mr. Pukier is a partner in the Toronto office and former head of its public M&A group. He focuses on cross-border M&A, corporate finance, complex corporate reorganizations, public policy, privateequity transactions and fund formation. Mr. Raizenne's tax practice includes cross-border and domestic M&A, corporate reorganizations and restructurings, corporate finance, international tax and trusts, dispute resolution and tax litigation. He teaches tax at McGill's law faculty. Mr. Raymond practises securities law; debt, equity and project financing; and public and private M&A. He represents issuers including Bombardier, Quebecor, Metro, Atrium, Mediagrif and Canada Lithium, underwriters and PE funds in Canada and abroad. Mr. Raymond coordinates our firm's multiple country and regional initiatives. Practises M&A, securities regulation and corporate finance. Experienced in national and international securities offerings, tender offers and financings. 13-04-23 1:08 PM