When a company acquires another company or merges with another company, there are some serious legal matters that need to be tended to. Just one of these many issues is the matter of intellectual property. A recent news story exemplifies this fact.
A company called CoStar, which handles commercial real estate data, purchased another company called LoopNet in 2012. LoopNet had a partial interest in another company at the time called xCelligence, which is a competitor of CoStar.
When the $860 million acquisition was scrutinized by officials, they determined that in order for the deal to go through, LoopNet would have to sell its stake in xCelligence and that CoStar would have to provide xCelligence with a list of real estate brokers that used LoopNet in the last few years.
While this was done, CoStar is now alleging that xCelligence used some 9,000 photos from LoopNet in an unauthorized manner. The lawsuit is an intellectual property lawsuit, and xCelligence denies the allegations.
Look, acquisitions are very tricky legal transactions that require a lot of scrutiny and oversight, as well as preparation and diligence on the part of the company that is being acquired and the company that is making the purchase. There are so many issues that can come up during the weeks and months it will take to fully complete the transaction.
This why it is imperative that companies in the middle of a merger or acquisition need legal representation and advice to ensure their massive transaction is completed in an appropriate manner.
Source: Memphis Business Journal, “CoStar sues the competitor it bolstered with its LoopNet merger,” Daniel J. Sernovitz, Dec. 15, 2016