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For many businesses, intellectual property sits at the heart of enterprise value. Trademarks underpin brand recognition, trade secrets protect competitive advantage, and in an increasingly technology-driven environment, software, data, patents and know-how are often critical assets.

When high-value corporate relationships break down – whether in M&A transactions, strategic investments or founder disputes – the most contentious and complex issues often centre on who owns the IP, who is entitled to use it, and on what terms. These disputes sit at the intersection of corporate and IP law.

IP challenges in collapsed deals

IP disputes relating to collapsed deals generally fall into two categories:

1. 1. Pre-completion breakdowns. Such disputes commonly concern the misuse of confidential information or other IP shared during evaluations.
   2. Post-completion disputes. These disputes can be much more varied and include issues such as whether all promised material has been delivered, whether the technology performs as represented and whether there is a clean title in the IP.

Regardless of the stage, speed is critical. Immediate steps often include ring-fencing confidential information and preserving evidence.

IP risks in joint ventures

JVs involve close collaboration between partners and often co-development of partner-contributed IP. But when the trust breaks down, disputes often arise over:

1. 1. Ownership of jointly developed IP. Disputes arise especially where contracts do not clearly allocate ownership in the event of a breakdown in the relationship.
   2. Competing ventures. Conflicts occur when one partner may have taken IP from the JV for its own business or to launch a competing business.

Even where the dispute is commercial in nature, IP often becomes the focal point because it represents the most valuable output of the JV. Parties frequently seek declaratory relief to clarify ownership, alongside interim measures to restrain competing use pending resolution.

IP risks in early-stage startups

A recurring flashpoint, especially for early-stage companies, arises when founders contribute pre-existing IP such as code, prototypes, branding, datasets or designs without a formal assignment to the company, which then builds its business on top of this contribution.

This is often not a big issue in a company’s nascent phase, but when the founder departs or relationships deteriorate before the situation is fixed, critical issues surface. For example, without a written assignment, the founder may legally retain ownership. By that stage, the IP may be too connected with the founder, making a clean separation very difficult.

These disputes can have serious commercial consequences, materially impacting funding, growth and even the company’s ability to continue operating. To resolve such disputes, evidence of the respective parties’ contributions, contemporaneous communications, and a compelling narrative is critical.

Challenges in valuing and liquidating IP

A common theme across IP disputes in the corporate context is the difficulty of valuing and liquidating IP.

Valuation comes with issues relating to the correct methodology to be used. Arriving at an accurate value is made doubly difficult because of the practical difficulty of liquidating IP, which rarely has a ready resale market – it is not amenable to being sold by auction.

Buyers need to conduct due diligence, determine the commercial value of the IP and understand how they can extract the full value from it (for example, engaging employees with the necessary technical skillset and know-how to effectively operationalise the IP).

Appointing a good valuation expert early can be a critical strategic tool – not only for litigation or arbitration strategy, but also in driving settlement.

Cross-border IP risks and strategy

IP disputes are becoming increasingly multi-jurisdictional. Development teams are often distributed, business operations can straddle multiple jurisdictions, and multinational structures create overlapping legal frameworks.

Common complications from this include divergent rules on ownership of employee-created or jointly developed IP and varying standards of IP protection.

These issues require the formulation of a co-ordinated and complete cross-border strategy, particularly where urgent interim relief or evidence preservation is required.

Conclusion

As businesses become more reliant on intangible assets, IP increasingly sits at the centre of corporate value and, when relationships break down, at the centre of dispute risk. IP disputes often require timely, appropriate action – such as urgent interim injunctions or the early appointment of the right expert – balanced by the careful consideration of potential cross-border complications.

Una Khng is a director and the head of commercial disputes, and Basil Lee is an associate director and co-head of intellectual property and technology, media and telecommunications at Helmsman in Singapore

HELMSMAN
21A Duxton Hill
Singapore 089604

Contact details:
Tel: +65 6816 6660
Email: una.khng@helmsmanlaw.com
Email: basil.lee@helmsmanlaw.com