mARCH 2012 www.lawyer-monthly.com

IP issues in M&A Peru

Mergers and acquisitions are complex and potentially tricky transactions, subject to a significant amount of varying complications and issues. One of these issues is Intellectual Property, which is of course a vast practice area in itself. To find out about the IP issues involved in M&A, Lawyer Monthly speaks to Oscar Mago, founding partner and CEO of Peruvian law firm, OMC Abogados & Consultores.

OMC ABOGADOS & CONSULTORES is a Peruvian-Latin American Law firm that has built a solid reputation for delivering creative, effective and valuable solutions to complex business matters. We are a full service Peruvian law firm mainly rendering various commercial law and intellectual property (“IP”) legal services to domestic and foreign clients in tight cooperation with worldwide law firms. Our areas of practice cover all needs of legal advice and court representation which our clients may have with a high level of profession. From incorporation, we have been providing various high quality commercial law and IP law services relating to various cross-border transactions involving Peru and Latin American countries to our clients around the world, and our legal services were highly appreciated and evaluated by our clients and international legal magazines.

Q Q

what are the most common IP-related challenges to arise within mergers and acquisitions in your experience?

We must consider that IP plays a very important role in mergers and acquisitions with the sole aim of acquiring IP assets belonging to the transferor/target company and all rights therein. The main reason for this is the fact that considering the rapid pace at which technology is developing, most companies find it more economical and practical to purchase newly developed intellectual property. Moreover, developing one’s own technology may be too expensive or uncertain which means acquisition is the only way of staying competitive. Because IP is an immaterial good, it is not easy to estimate its value. There appears to be difficulty in quantifying the asset value of intellectual property. This is where our experience and knowledge comes in, properly advising

Can you briefly introduce yourself and your firm?

depending on the circumstances and the transaction.

Clearly cross-border M&As have become a fundamental characteristic of the global business landscape. Some of the difficulties to face in a cross-border M&As deals are the inherently greater challenges of melding country cultures, communicating across long distances, dealing with misunderstandings arising from different business norms, and even fundamental differences in management style. To prevent these difficulties there are some basic principles that will make cross-border mergers work more smoothly, such as the strategic logic and acquisition integration. But the most important thing when a cross-border M&As deals is to work together with our associates in the other country in order to prevent any difficulty coming from different law, customs, jurisprudence, amongst other things.

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The more common risk is that the parties never agree to estimate the IP value of the company. The difficulty within M&As that involve intellectual property, is valuing it. It is critical in these negotiations to identify the different types of IP involved and understand the associated issues.

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Are there many cases of IP-related litigation that arise with the M&A market?

Yes, there are many cases since it is a way whereby both parties resolved its differences. For instance, last year our firm represented clients coming from all over the world in different industries like hydrocarbons, textile,

what are the transactional risks involved?

Oscar Mago

OMC ABOGADOS & CONSULTORES Av. 28 de Julio 562 “E” MIraflores Lima 18, PERU Phone: (511) 628-1238 Fax: (511) 628-1241 Emails: omago@omcabogados.com.pe / omcabogados@terra.com.pe Web site: www.omcabogados.com.pe

How do these challenges alter when a deal is cross-border?

food, manufacturing, fishing and textile. Most cases initiated as IP-related litigation that arise with the M&A market.

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Have you noticed a rise in IP-related cases as the world recovers from the financial downturn? will this continue?

Yes, last year our office handled twice filings than the previous year. Considering that Peru is, as of 2011, one of the world's fastest-growing economies, with an economy growing much above 6% and expected to keep on this track, investments in our country are coming from all over the world. This is why the number of Peruvian filings is increasing every year. LM

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