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Structuring and legal considerations

Key laws and regulations

What are the key laws and regulations implicated in technology M&A transactions that may not be relevant to other types of M&A transactions? Are there particular government approvals required, and how are those addressed in the definitive documentation?

Technology M&A in Brazil differs from ordinary M&A transactions owing to specific laws and regulations applicable. Besides general copyright regulations (Law No. 9,610/1998, the Berne Convention and the Agreement on Trade-Related Aspects of Intellectual Property Rights), intellectual property related to software is further regulated by Law No. 9,609/1998. There are also specific rules dealing with the use of the internet, with a potential impact on technology business (Law No. 12,965/2014), and personal data privacy (Law No. 13,709/2018, which will enter into force in February 2020).

Government rights

Are there government march-in or step-in rights with respect to certain categories of technologies?

There is no current provision or past record of government march-in or step-in rights. However, exclusive exploration of IP rights is time-limited before ending up in the public domain.

Legal assets

How is legal title to each type of technology and intellectual property asset conveyed in your jurisdiction? What types of formalities are required to effect transfer?

Legal title over technology and IP assets and rights, when registered before the National Institute of Industrial Property (INPI), is conveyed through the expedition of the respective certificate, according to the rules established by Law No. 9,279/1996 and Normative Instruction INPI No. 70/2017.

Due diligence

Typical areas

What are the typical areas of due diligence undertaken in your jurisdiction with respect to technology and intellectual property assets in technology M&A transactions? How is due diligence different for mergers or share acquisitions as compared to carveouts or asset purchases?

Due diligence in technology M&A transactions must cover the analysis of the situation of the assets and the rights, and consider any possible objection from third parties that may affect their property and exploration. In the case of carveouts or asset purchase, there is the additional concern of properly transferring property title before the INPI.

Customary searches

What types of public searches are customarily performed when conducting technology M&A due diligence? What other types of publicly available information can be collected or reviewed in the conduct of technology M&A due diligence?

The INPI offers public tools to search and verify the situation of assets and rights. Besides this, the main process of registration steps are available in the public records. Additionally, there are private companies that perform additional searches for competitors and potentially equivalent property.

Registrable intellectual property

What types of intellectual property are registrable, what types of intellectual property are not, and what due diligence is typically undertaken with respect to each?

Invention, innovation or utility models can be patented. Brands, logos, projects, and hardware and software can be registered. Personal creation and source codes of software can be copyrighted. Due diligence to each must verify title situation of the assets and identify possible upcoming conflicts with third parties.


Can liens or security interests be granted on intellectual property or technology assets, and if so, how do acquirers conduct due diligence on them?

There is no restriction to liens or security interest granted on IP or technology assets, nor a specific process to publicly record such grant. Contractual representation and warranties are commonly required to assure acquirers’ uncontested property.

Employee IP due diligence

What due diligence is typically undertaken with respect to employee-created and contractor-created intellectual property and technology?

Due diligence with respect to employee- and contractor-­created intellectual property and technology aims to ensure title over their rights. Parties must have formally agreed on the transfer to the target.

Transferring licensed intellectual property

Are there any requirements to enable the transfer or assignment of licensed intellectual property and technology? Are exclusive and non-exclusive licences treated differently?

Transfer or assignment of licensed intellectual property and technology shall be registered before the INPI, with specification on the term and exclusivity traits of the operation.

Software due diligence

What types of software due diligence is typically undertaken in your jurisdiction? Do targets customarily provide code scans for third-party or open source code?

Software due diligence aims to verify property of software developed or acquired by a target, and authorisation to explore software in use in the business. Open source codes are not provided to each other.

Other due diligence

What are the additional areas of due diligence undertaken or unique legal considerations in your jurisdiction with respect to special or emerging technologies?

Deals with special or emerging technologies and sensible to the point that regulation has been rapidly developing. Therefore, risk of restrictions to the application of the new technology ought to be searched, identified and considered before the deal is finalised.

Purchase agreement

Representations and warranties

In technology M&A transactions, is it customary to include representations and warranties for intellectual property, technology, cybersecurity or data privacy?

Absolutely. Representation and warranties are fundamental to protect an acquirer from aspects not disclosed or identified during the due diligence process. In general terms, these clauses must cover the legitimate title of property and absence of claims from third parties or authorities.

Customary ancillary agreements

What types of ancillary agreements are customary in a carveout or asset sale?

The most relevant ancillary agreements are those that bind target’s customers to keep contracts in force despite the transfer or assignment of IP assets and rights. Communication of the transfer of property to the INPI is also needed to give notice to third parties.

Conditions and covenants

What kinds of intellectual property or tech-related pre- or post-closing conditions or covenants do acquirers typically require?

Acquirors typically require target to take all procedures necessary to embed the transfer of title of the intellectual property. Historic studies, related to the development of such property, are also usually requested. Immediate changes and future assistance - according to the case - may be negotiated.

Survival period

Are intellectual property representations and warranties typically subject to longer survival periods than other representations and warranties?

Survival periods of representations and warranties are equivalent to the period in which breaches might be identified or cause effects to the acquirer. While the target wishes to close the deal, the acquirer seeks to ensure implementation of the transaction and its desired effects.

Breach of representations and warranties

Are liabilities for breach of intellectual property representations and warranties typically subject to a cap that is higher than the liability cap for breach of other representations and warranties?

It cannot be said that liabilities for breaches of IP representations and warranties are typically subject to a higher or lower cap than the liability cap for breach of other representations and warranties.

Are liabilities for breach of intellectual property representations subject to, or carved out from, de minimis thresholds, baskets, or deductibles or other limitations on recovery?

There is usually no limitation of liability for the breach of IP representations. On the contrary, in cases of material breaches that compromise the premises of the deal, there are situations in which the whole deal can be undone and the acquirer claims for damages.


Does the definitive agreement customarily include specific indemnities related to intellectual property, data security or privacy matters?

Definitive agreements usually include specific indemnities related to the functionality of intellectual property and losses that derive from data security or privacy matters.

Walk rights

As a closing condition, are intellectual property representations and warranties required to be true in all respects, in all material respects, or except as would not cause a material adverse effect?

There is no general rule as to if truthfulness of IP representations and warranties is required in all aspects or only to the extent that they do not cause a material adverse effect. This will depend on the type of intellectual property being transferred and the level of tolerance the acquirer has to future change.