The US buyer had been courting the UK target business for some time and saw an opportunity to acquire its technology, in the form of a machine learning solution to speed up and remove human touch points in supply chain and logistics processing.

As is typical in many software businesses the target had relied heavily on independent contractors to develop software code with limited formalities and did not obtain IP assignment agreements. In addition and as is also common, these independent contractors had used a large amount of open source programs as part of the target’s solution; such use potentially in breach of open source licenses.

The key concerns of the buyer which it sought cover for under were concurrent ownership and infringement challenges by former contractors and infringement and copyleft risk posed by th use of open source code.

A sophisticated US corporate buyer was acquiring a UK software business which operated in the supply chain and logistics sectors with plans to integrate the two companies’ solutions and had identified two IP issues during due diligence.

In addition to the standard W&I coverage and having agreed a retention structure and mitigation approach, we agreed to cover the known issues under the W&I policy by scraping seller’s knowledge from the SPA and disapplying buyer’s knowledge of the identified issues from the disclosure letter and due diligence.