Asset Sales and Purchases
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When buying or selling a business, parties tend to spend considerable time negotiating a price for the value of the “assets” which for many, lawyers included, means tangible property – the building lease, land, inventory, equipment, client lists and revenues, to name a few. However, the intangible or "intellectual property" created, can actually be the most valuable asset of the business.
Accordingly, when you are purchasing a business it is essential that you ensure that all of the intellectual property is properly assigned to you, including the assignment of any copyright and waiver of moral rights associated with any original piece of work, this can include logos, website design, marketing materials and store design. Evidence of this assignment is important to have for the purposes of transferring the ownership of the intellectual property on the applicable intellectual property office registers and for the ability to enforce your rights against infringing parties. Many purchasers unknowingly purchase what they believe to be is a business with a well-known brand and associated goodwill only to discover that the intellectual property comprising the brand, such as a trademark and associated copyright, has not been assigned and that the original owner has opened another similar business nearby under the trademark that the purchasers thought they had purchased.
Similarly, as a vendor, it is important to ensure that you are not underestimating the value of your business by failing to include the value of the intellectual property when negotiating a price. As a vendor, you may choose to sell different parts of your business to different purchasers, for example, tangible assets such as equipment may be sold to one purchaser whereas intangible assets such as the trademark and proprietary secrets of the company may be sold to another.
Our Intellectual Property Team would be pleased to assist you with understanding the value of the business your are wishing to acquire or sell and to create an asset and purchase sale agreement that will obtain the best price for you as a vendor or the optimal value of the business for you as a purchaser.