In a cross-border technology transaction with high commercial and regulatory stakes, we advised our client on its acquisition of the robotics intellectual property and associated customer data from the assets of the US company behind a celebrated AI-driven social robot designed to support emotional and social development in children aged 5 -10.
The robot was positioned not merely as a toy but as a companion and developmental aid that engaged children through emotionally intelligent dialogue and interactive activities. However, the target was forced to suspend operations following a critical funding round collapse. The abrupt shutdown generated significant community reaction due to emotional bonds formed by child users.The transaction presented exceptional complexity and risk, characterised by the following factors:
1. Auction-Type Scenario: Multiple parties expressed interest, and no exclusivity was agreed at the outset. Speed was of the essence, requiring rapid diligence and decisive negotiation to secure the assets in a competitive insolvency auction environment.
2. As-Is-Where-Is Sale with Intrinsic Operational Risk: The target assets included sensitive data, including children’s data and associated videos captured through interactions with the robot. The bankruptcy context raised questions around chain of title for IP and data ownership, ongoing liabilities linked to data protection and privacy (especially given the profile of the end-users), and potential debtor claims. The deal required a pragmatic, risk-calibrated assessment of what could be acquired and how that data could be lawfully retained or transitioned. No warranties or indemnities typical in a healthy commercial sale were available.
Despite these limitations, Ikigai Law played a pivotal role in foreseeing and mitigating risk. Ikigai Law had negotiated clauses as to availability of certain data with the Target. This allowed the client to reopen the deal and negotiate a significant discount on the purchase price after the signing of the documents.
The Ikigai Law team comprised of Managing Partner Anirudh Rastogi, Sreenidhi Srinivasan (Partner) and Bobby Jain (Senior Associate) working in close collaboration with US counsel, Orrick Herrington & Sutcliffe LLP. The Ikigai Law M&A team regularly advises on cross-border deals.
Image credits: AI generated
