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02/15/2007, 10:15 AM - 11:15 AM
Moderator:
Larry Augustin, Angel Investor.
Speakers:
Deborah Magid, Director, Software Strategy, IBM Venture Capital Group.
Theresa Bui Friday, Co-founder, Vice President, Palamida, Inc.
Mark Radcliffe, Partner, DLA Piper US, LLP.
Doug Levin, CEO, Black Duck Software.
The widespread use of Open Source software creates significant challenges for companies participating in M&A events. Today's developers are members of an active and interconnected global community, combining open source code with their own to make improvements. But this process can easily bypass company policies and procedures on software acquisition and licensing review and approval, and the result often is significantly increased business risk and questionable provenance of code. Often these issues are discovered only late in the M&A process. The impact can be catastrophic:
A public company finds that it cannot report accurately, as required by the Sarbanes-Oxley Act, on the value of software assets because the use of mixed IP has likely reduced their value.
A lawsuit filed over violated IP rights forces a company to remedy the infraction with a costly and embarrassing product recall.
IP concerns cause a large customer to back away from a major product purchase.
Unresolved IP issues force a funding source to cancel a planned equity investment.
A code review during due diligence raises questions about open source license compliance, resulting in cancellation of a planned acquisition.
A software company's customers demand indemnity against any legal claims associated with their use of the company's product.
A panel of experts in software M&A and compliance issues will address these risks and discuss ways to mitigate them.
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