Sign up to save your podcasts
Or
Share Holding Intellectual Property using an ADGM SPV for Startups
Share to email
Share to Facebook
Share to X
Share to email
Share to Facebook
Share to X
Or
Holding Intellectual Property using an ADGM SPV for Startups
This episode is also available as a blog post: https://10leaves.ae/publications/adgm/holding-intellectual-property-using-adgm-spv
Identification, protection and exploitation of IP
Identifying valuable IP is a process in itself. Both management and staff have to perform this exercise on a consistent basis, especially in edutech enterprises. Multi-jurisdictional firms may face an additional challenge in coordinating their IP identification efforts.
IP, once identified, should be protected. This exercise is detailed, and involves a thorough analysis of the current jurisdictions where the organisation operates, the associated costs and the risks involved in not moving fast enough. Some jurisdictions, such as the European Union, allow for a single application process; most others have to be done individually. IP protection costs in the GCC are high (approximate US$ 4,300 per country), and there is no unified system for IP protection, which means that startups often face the dilemma of deciding when to go ahead with registering the IP.
Once protected, the IP has to be exploited. Here again, multiple mechanisms exist, from internal IP licensing, to third-party licensing for production in the name of the licensor. In case of some activities, such as services, extensive agreements covering IP licensing and payment of royalties have to be put in place.
We had a client operating in three jurisdictions with sales in fifteen others. Each operational jurisdiction had one piece of IP that was cross-licensed to the others and sold in all 15, thus having a potentially 500 transactions to record in its accounts and contracts management database. Then there are tax and transfer-pricing considerations to add to the mix.
Using an ADGM SPV to hold IP
Using an ADGM SPV to hold Intellectual Property has multiple benefits, including:
The ADGM SPV can be structured in a manner where the Intellectual Property is assigned to it using IP Assignment Agreements, and the SPV can then sub-assign this Intellectual Property to subsidiaries/other entities in the UAE and worldwide. The royalties thus derived can be consolidated in the SPV, thus leading to operational and tax efficiencies.
View all episodes
By 10 LeavesThis episode is also available as a blog post: https://10leaves.ae/publications/adgm/holding-intellectual-property-using-adgm-spv
Identification, protection and exploitation of IP
Identifying valuable IP is a process in itself. Both management and staff have to perform this exercise on a consistent basis, especially in edutech enterprises. Multi-jurisdictional firms may face an additional challenge in coordinating their IP identification efforts.
IP, once identified, should be protected. This exercise is detailed, and involves a thorough analysis of the current jurisdictions where the organisation operates, the associated costs and the risks involved in not moving fast enough. Some jurisdictions, such as the European Union, allow for a single application process; most others have to be done individually. IP protection costs in the GCC are high (approximate US$ 4,300 per country), and there is no unified system for IP protection, which means that startups often face the dilemma of deciding when to go ahead with registering the IP.
Once protected, the IP has to be exploited. Here again, multiple mechanisms exist, from internal IP licensing, to third-party licensing for production in the name of the licensor. In case of some activities, such as services, extensive agreements covering IP licensing and payment of royalties have to be put in place.
We had a client operating in three jurisdictions with sales in fifteen others. Each operational jurisdiction had one piece of IP that was cross-licensed to the others and sold in all 15, thus having a potentially 500 transactions to record in its accounts and contracts management database. Then there are tax and transfer-pricing considerations to add to the mix.
Using an ADGM SPV to hold IP
Using an ADGM SPV to hold Intellectual Property has multiple benefits, including:
The ADGM SPV can be structured in a manner where the Intellectual Property is assigned to it using IP Assignment Agreements, and the SPV can then sub-assign this Intellectual Property to subsidiaries/other entities in the UAE and worldwide. The royalties thus derived can be consolidated in the SPV, thus leading to operational and tax efficiencies.