Cross-Border Tech Deals Trigger Complex IP Ownership and Privacy Compliance Issues

The result, according to Mayer Brown attorneys, is a regulatory environment where the legal risks of collaboration across jurisdictions can outpace the business opportunity if not addressed through rigorous contracting and compliance planning.

Transactions involving software code, proprietary algorithms, training data, and technical know-how are the most at risk of leakage or misappropriation. A recurring issue, per Mayer Brown, is ambiguous IP ownership.

Without clearly defined rights over background IP (pre-existing assets) and foreground IP (newly developed deliverables), companies risk losing control over their most valuable technology. The danger intensifies when local IP laws differ sharply from U.S. standards. Many jurisdictions, for instance, do not recognize the “work-for-hire” doctrine in U.S. law that grants IP ownership of works produced by employees or contractors to the employer or contract issuer.

Joint ownership structures also present complications. Because each co-owner holds an undivided interest, either may license the asset unilaterally under U.S. law, diluting its commercial value and complicating enforcement. Mayer Brown recommends companies avoid joint ownership where possible, substituting reciprocal licenses with strict use limitations instead.

Enforcement is another pressure point. Even a well-drafted IP clause in a contract means little if a company cannot secure local remedies. Weak rule of law, procedural barriers such as notarization and translation requirements, and courts that move slowly or fail to recognize foreign judgments can all undermine IP protection. Arbitration in a neutral jurisdictions and dispute resolution clauses that mitigate that risk.

Cross-border deals also now regularly implicate data protection and localization requirements. With laws such as the EU’s General Data Protection Regulation (GDPR), Brazil’s LGPD, and China’s localization mandates, companies must map data flows and segment systems to comply with each jurisdiction’s demands.

The compliance burden is deepening under new U.S. measures as well, such as the Department of Justice’s rule implementing Executive Order 14117 that restricts transfers of even anonymized or de-identified data deemed “sensitive.” These restrictions effectively expand the scope of regulated data and raise the bar for due diligence in multinational technology partnerships

Building data mapping and segregation into transaction planning early, before a deal is consummated can help avoid conflics. Contracts should specify not just compliance obligations, but also technical safeguards, including controlled access environments and localization-ready architecture.

Technology subject to U.S. export controls adds yet another layer of complexity. Regulations under the Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR) can reach foreign subsidiaries and third-party affiliates. Companies must identify controlled technologies at the outset, classify software and hardware accurately, and implement access controls to prevent exposure to restricted jurisdictions. Failing to do so can trigger severe penalties or even loss of access to key technologies.

Cross-border technology deals demand both precision and restraint. Companies cannot rely on templates or boilerplate confidentiality clauses; they should instead adopt bespoke terms that reflect the real-world asymmetries of international law. Proactive IP structuring, enforceable data privacy frameworks, and export control diligence essential to make innovation sustainable across borders.