Tech M&A Risks Mount Over Broken IP Chain of Title, Legal Expert Warns

Flaws in intellectual property ownership chains pose substantial risks to technology mergers and acquisitions, threatening deal valuations and delaying closings across the sector.

Speaking to Managing IP, Richard Quatrano, counsel at law firm Olshan Frome Wolosky, emphasized that buyers and sellers must thoroughly audit written IP assignments before finalizing deals. Without clear verification, gaps in ownership documentation can introduce major legal liabilities.

A break in the chain of title typically occurs when software code, patents, or related proprietary tools lack proper documentation transferring ownership from developers, contractors, or founders to the target entity. In the absence of an unbroken chain of title, acquiring companies risk purchasing assets clouded by potential third-party ownership claims.

Such oversights often complicate deal mechanics. Quatrano told Managing IP that title deficiencies can prompt buyers to renegotiate commercial terms, demand escrow holdbacks, or slash purchase prices to offset legal exposure. In severe cases, an unresolvable ownership dispute can terminate an acquisition entirely prior to closing.

## Why It Matters

For media conglomerates and entertainment firms actively buying specialized technology platforms, visual effects software, and AI-driven production tools, chain of title scrutiny is increasingly paramount. Early-stage development work that was not properly assigned under contract can quickly evolve into an expensive liability once larger corporate capital enters the picture.