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Africa & Asia
Connecting Continents, Shaping Law
This month, our focus turns to Africa and Asia, two regions reshaping global growth and investment. From Egypt’s ongoing legal and economic reforms and the strengthening of UAE–Moroccan relations, to the rise of Korean investment across the Middle East, this issue highlights the developments driving change across these markets.
We also explore the UAE’s role as a bridge between regions – a hub for private wealth management, dispute resolution, and cross-border collaboration, connecting businesses and investors across Africa and Asia. The articles in this edition offer practical insights into how these shifts are influencing trade, regulation, and market confidence across the wider region.
2025 is set to be a game-changer for the MENA region, with legal and regulatory shifts from 2024 continuing to reshape its economic landscape. Saudi Arabia, the UAE, Egypt, Iraq, Qatar, and Bahrain are all implementing groundbreaking reforms in sustainable financing, investment laws, labor regulations, and dispute resolution. As the region positions itself for deeper global integration, businesses must adapt to a rapidly evolving legal environment.
Our Eyes on 2025 publication provides essential insights and practical guidance on the key legal updates shaping the year ahead—equipping you with the knowledge to stay ahead in this dynamic market.
A complete spectrum of legal services across jurisdictions in the Middle East & North Africa.
IP Due Diligence in Technology M&A: Three Hidden Pitfalls That Can Derail Your Deal
2 min 51 sec
December 3, 2025 (Edited)
Intellectual property (IP) often represents the most valuable asset in a technology M&A transaction. Yet IP due diligence remains one of the most underestimated parts of technology deals. A simple oversight can mean the difference between acquiring:
(a) a company with proprietary core technology,
(b) a company that purports to own proprietary technology, or
(c) a reseller of third-party systems.
This article covers three common pitfalls we see when advising on technology M&A transactions in the UAE. Understanding these issues is essential for buyers to protect their investment.
Employee vs Contractor-Created IP
The most common issue we uncover during technology M&A due diligence concerns IP ownership. Who actually owns the IP created by employees and contractors? The UAE legal framework differs significantly from common law jurisdictions.
Under UAE Federal Law No. 38 of 2021, copyright in works created by employees during employment generally vests in the employer. However, this default status does not automatically extend to inventions, trade secrets, or know how.
For independent contractors and consultants, the position is less clear. You need explicit written assignment of IP rights to ensure ownership transfers to the company. The commercial implications of not ensuring there are appropriate IP assignment provisions can be severe. A technology company whose core platform was partially developed by contractors without proper IP assignments may not actually own the technology it purports to sell or licence.
Below are some typical scenarios that often need to be considered, especially in technology M&A transactions.
Early-stage development
Many technology companies begin as informal ventures. Founders and early developers contribute code and innovations before formal employment relationships are established. Without retrospective IP assignments, ownership of these foundational technologies may remain with individuals rather than the company.
Contractor engagement
Technology companies often engage contractors to supplement their development capacity. If these contractors lack explicit IP assignment provisions in their agreements, the company may lack clear ownership of significant portions of its technology platform.
Offshore development
UAE technology companies frequently use offshore development resources in India, Pakistan, or Eastern Europe. This means that IP ownership may be governed by foreign laws with different default rules. If offshore developers are engaged through intermediary companies, multiple layers of IP assignment may be required. Some contracts may even state that consultants retain the rights to pre-existing code or “background IP” and provide only a limited licence.
Manpower service providers
A particularly complex issue involves third-party manpower service providers. Many UAE technology companies engage contractors through manpower agencies or professional services firms rather than the individuals themselves. This creates a triangular relationship between the technology company, the manpower provider, and the individual contractor.
It is necessary to be wary that, even if the technology company has an agreement with the manpower service provider, IP ownership may not automatically transfer to the technology company. The individual contractor may retain ownership unless both of the following are covered:
- the contractor has assigned IP rights to the manpower service provider, and
- the manpower service provider has assigned those rights to the technology company.
If either link in this chain is missing, the technology company may not own the IP created by contractors provided through the manpower agency.
When undertaking due diligence, comprehensive disclosure of all individuals who contributed to the target’s IP is essential. It is important to see copies of employment contracts, contractor agreements, IP assignment agreements and any third-party service provider or manpower agreements.
Written by
e.Imrie@tamimi.com 
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Whether you are a C-suite executive, an investor, or an in-house counsel involved in a technology M&A transaction, intellectual property (“IP”) often represents the most valuable asset meaning that it cannot be denied that IP due diligence is a fundamental aspect of a deal. Yet it remains one of the most frequently underestimated part of technology transactions.
Use of Open-Source Software
Open-source software (OSS) has become prevalent in technology development across the UAE. The use of OSS offers significant advantages in cost and development speed for companies, but it also introduces complex compliance obligations via their licensing terms, which can materially impact transaction valuations.
Different open-source licences impose varying obligations. Permissive licences (such as MIT or Apache) generally pose minimal risk. “Copyleft” licences (such as GPL) may require that derivative works be released under the same licence. This potentially forces proprietary code into the public domain. Discovery of GPL-licensed code integrated into proprietary products can have a drastic effect on the valuation of the target.
Sophisticated buyers in the UAE market now routinely employ automated code-scanning tools during due diligence. These tools detect open-source code, identify the applicable licences, and flag potential compliance issues.
Where the target has disclosed that it uses OSS, we typically ask to see the target’s OSS compliance policies and procedures. We request a list of all OSS components and their respective licences and ensure specific warranties regarding OSS compliance are included in the transaction documents.
Trade Secret Protection
For certain technology businesses, trade secrets are an important IP asset. They take many forms, such as an algorithm, a business process, or technical know-how. When undertaking due diligence regarding trade secrets, it is necessary to ensure that the target business has taken reasonable steps to maintain confidentiality. This is required to benefit from trade secret protection in the UAE under Federal Law No. 11 of 2021.
Appropriate confidentiality provisions should be included in employment contacts with employees and contractors. Where necessary, confidentiality agreements (such as non-disclosure agreements) should be in place when the target shares confidential information with business partners or other third-party stakeholders.
The target should also ensure strict access controls for sensitive information within the business on a need-to-know basis. We would expect the target to have various policies in place, such as compliance and protection, best practice training for its workers, and record keeping of trade secret inventory.
If such protection measures and processes are not in place, the target’s trade secrets in the UAE may not be sufficiently protected. Lack of control to protect such valuable assets puts them at risk of losing their worth and potentially the overall value of the transaction.
Conclusion
IP due diligence in UAE technology transactions requires rigorous analysis. It extends well beyond reviewing patent counts or trademark registrations. The issues discussed above represent some of the most common pitfalls that can materially impact transaction value or success.
For buyers, comprehensive IP due diligence is essential. It validates the target’s IP assets, identifies risks and structures appropriate protections through warranties, indemnities, and price adjustments.
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