When selling your business there are certain assets that are considered legally protected intellectual property such as patents, trademarks and copyrights. Frequently, business owners are not even aware that they have intellectual property assets to protect. Before you set a sale date for your business, hire an attorney to begin a review of your intellectual and intangible assets. Here’s a checklist of what you should consider:
Trade secrets are different from copyright ownership. Trade secrets may be the “secret sauce” to your company’s processes, sales or other reasons for success. Unfortunately, trade secrets may not be documented in a way that can be currently communicated to a potential buyer. Your company should disclose trade secrets only upon close scrutiny and advice from an attorney who specializes in this area. There may be significant risks or rewards with your company’s trade secrets. The risk may be in disclosing this information in an improper manner to a prospective buyer, especially if that prospective buyer is a competitor. The reward may be a significant financial or negotiating tool if this information really is secret sauce and if it is disclosed in the proper manner to the prospective buyer.
Trademarks are assets that are governed by the United States Patent and Trademark Office (USPTO). Compile a list of all trademarks owned (include USPTO issued registration numbers), trademarks in the process of approval, and trademarks that are used but not owned by the company. Include trademarks and applications by subsidiary companies as well.
Patents owned by your company may be worth a significant amount of money. List all patents issued by the USPTO including abandoned applications and invention disclosures.
Sometimes your company may license intellectual property from third parties. The licence for this is usually in the form of a contract. Disclose any and all licensing contracts to the prospective buyer. Buyers will want to know if the licenses are transferable and the estimated costs of using them.
Do you need clarity when it comes to planning your exit strategy? Contact me.