Intellectual Property Considerations When Looking to Sell Your Business

By George Likourezos, Esq.

When looking to sell your business, there are several important intellectual property (IP) considerations to take into account to maximize the value of your company and ensure a smooth transaction. Some of these considerations include:

Identify and Protect Your IP Assets: Conduct a thorough audit of your company’s IP portfolio to identify all valuable assets, including patents, trademarks, copyrights, trade secrets, and proprietary technology. Ensure that all IP assets are properly protected through registrations, contracts, and confidentiality agreements.

Ownership and Rights: Confirm that your company owns or has the legal right to use all IP assets included in the sale. This may involve reviewing ownership documents, employment agreements, licensing agreements, and third-party contracts to ensure there are no disputes or encumbrances.

Valuation of IP: Assess the value of your IP assets and their contribution to the overall value of your business. Consider factors such as market demand, competitive landscape, revenue generation, and potential for future growth when determining the value of your IP portfolio.

Due Diligence: Prepare comprehensive documentation and disclosures related to your IP assets for potential buyers to review during the due diligence process. This may include IP assignments, registrations, licensing agreements, infringement claims, litigation history, and any pending or potential risks.

IP Representation and Warranties: Provide accurate representations and warranties regarding your IP assets in the sale agreement. Disclose any known issues, risks, or limitations associated with your IP portfolio to avoid future disputes or liabilities.

IP Transfer and Assignment: Clearly define the terms of transferring and assigning IP assets to the buyer as part of the sale agreement. Ensure that all necessary transfer documents, assignments, and filings are completed to transfer ownership of IP assets seamlessly.

Non-circumvention and Non-disclosure Agreements: Consider including non-circumvention and non-disclosure agreements in the sale agreement to protect your company’s IP assets and confidential information from misuse or disclosure by the buyer or its affiliates.

Post-sale Protection: Implement measures to protect your company’s IP assets after the sale, such as maintaining confidentiality of sensitive information and adhering to all non-disclosure agreements entered into with the buyer.

Consultation with IP Experts: Seek guidance from experienced IP attorneys or advisors throughout the sale process to ensure compliance with IP laws and regulations, mitigate risks, and optimize the value of your IP assets. The IP attorney can apply for registration of trademarks, brands and logos, and file patent applications for technologies in development to increase the value of the IP, and hence the value of your company.

By addressing these IP considerations proactively and strategically, you can enhance the attractiveness of your business to potential buyers, minimize risks, and maximize the value of your IP assets in the sale transaction. The law firm of Carter, DeLuca & Farrell LLP can help guide you through these IP considerations months and even years before you sell your business to make sure your IP is properly addressed, maintained and fully accounted for when it comes time to sell your business. Carter DeLuca has assisted hundreds of companies protect their intellectual property, including their proprietary technologies via patents, their brands and logos via trademarks, their software and websites via copyrights, and their trade secrets.

For a free consultation, in establishing safeguards and measures for protecting your trade secrets and other intellectual property, which is made available through Spotlight Family Office Group, please contact us at Info@SpotlightFamilyOffice.com.