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How to avoid mismatches between ‘economic’ and ‘legal’ ownership of IP

Intercompany Agreements

24 August 2020

In the ‘bad old days’ of TP, many advisers appeared to take a fatalistic view of intangibles and intellectual property: the economic analysis of IP ownership took place in its own separate silo, and no attempt was made to reconcile that with legal and commercial rights.

The problem with this approach is that it results in an overall structure which is impossible to manage. This is because there are two conflicting ‘economic’ and ‘legal’ worlds. Those two worlds intersect in the contractual allocation of risk, which is a fundamental part of TP analysis as prescribed by the OECD’s TP Guidelines.

The antidote to this problem is very simple: apply some proper thought. No need to overcomplicate things, and lengthy legal agreements are rarely appropriate. But multinational groups deserve to have a coherent structure which respects the legal and compliance obligations of directors. And it’s our collective duty to get the job done competently.

To help with this task, we’ve created a new checklist for creating or reviewing intercompany agreements relating to IP. You can access it here.

If you’re involved in this space, and you’d like to arrange a free consultation with one of our senior lawyers to discuss the legal implementation of TP (or specific issues you are facing), I would be delighted to hear from you. Just drop us a line at info@lcnlegal.com, and we will be very happy to help arrange a video call at a convenient time.

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Article by
Paul Sutton
LCN Legal Co-Founder

Free Guide: Effective Intercompany Agreements for TP Compliance