During the buyer’s due diligence process several IP-related issues were identified with regards to ownership of the target’s IP as well as the use of open source software (OSS) in the game’s development that would ordinarily be excluded under W&I policies as a result of the issues being disclosed to the policyholder. The private equity investor was focussed on appointing an insurer who, alongside underwriting the general warranty suite, would be able to offer a solution for dealing with these known issues whilst also maximising cover for it in respect of certain material risk areas, such as title to the video game IP and non-infringement of the video game IP.

One of the key concerns for the investor was that it had invested substantial resources in carrying out a fulsome diligence process in respect of the target’s key IP assets but was concerned that it would not get appropriately proportionate cover from the insurance market given the technical and complex assets it was acquiring.

A prominent global financial investor acquiring a premium video game developer with high profile video game IP asked us to provide a novel W&I insurance product focussed on maximising coverage of the developer’s core, legacy game IP and affirmatively covering several IP issues identified through its due diligence.

Using our in-house IP experience we were able to carry out an enhanced due diligence review of the target’s IP portfolio and address the key risks with focussed Q&A directed to the investor’s advisers on the core IP assets. As a result of our review of the IP and technical DD carried out by the buyer supplemented by our in-house diligence exercise we were able to underwrite the complex risks of the business and were able to offer a bespoke IP W&I policy focussed solely on enhanced warranty coverage around ownership, non-infringement and OSS risk and we were also able to affirmatively scrape the problematic disclosures that had been made around title and OSS issues. The supplementary IP W&I policy was provided alongside the general W&I policy and the process was able to run concurrently with the buyers transaction process such that it did not impact upon the transaction timetable.