In a recent article on BloombergLaw.com titled “TikTok Forced Sale Bid Embroils ByteDance’s Vast Patent Trove,” the spotlight is on ByteDance’s formidable patent portfolio, which poses a significant challenge to any mandated sale of TikTok. With over 900 US patents covering pivotal technologies, the divestment process entails navigating legal intricacies and financial considerations, particularly given the global reach of ByteDance’s patents.

Although a U.S. bill stipulates TikTok’s sale within 180 days, ByteDance is poised to explore all legal avenues before considering divestment. This stance underscores apprehensions regarding the tight timeline and potential investor pressures amidst geopolitical tensions.

“‘In most spin-offs, both the parent company and subsidiary want the other to be successful,’ said Dickinson Wright PLLC Partner Jomy Methipara. ‘But the divestiture could become more difficult if there are internal battles over which business should get what IP,’ he said.”

The uncertainty surrounding the forced divestiture extends to the fate of ByteDance’s intellectual property, raising questions about whether selling off IP rights or granting exclusive licenses would effectively address national security concerns.

As Methipara further notes, “A potential buyer would likely prefer outright ownership, yet an exclusive license with enforcement and sublicensing rights could also suffice.”

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