I'm in the early stages of selling my specialty food business. The brand name is a big part of the value, and I own the trademark. But I'm confused about how to transfer it properly. Do I assign the trademark separately in the asset purchase agreement, or does it just go along with the goodwill? And what about the domain name and social handles , should those be in the same assignment document? I want to avoid any gap that lets the buyer use the name without actually owning it, or vice versa.
Trademarks
How to handle brand names and trademarks in a transfer deal
The trademark should be explicitly assigned in writing. Don't rely on 'it goes with the goodwill' language. Use a separate short trademark assignment recordable with the USPTO. The domain and handles can be in the APA or a separate IP assignment, but make sure they're listed.
What mountain_goat said. Also check if your trademark is registered or just common law. If registered, file the assignment with the USPTO. If not, you still need a written assignment, but it's harder to enforce
I sold my bakery last year. We put the trademark, domain, and Instagram handle all in one IP assignment exhibit. Buyer's lawyer insisted on a separate recordation document for the USPTO. Cost a few hundred bucks but worth it. The tricky part was the social handles — transferring ownership of a business account can be a pain depending on the platform.
Don't forget about any pending trademark applications. If you have one in the pipeline, that needs to be assigned too. And make sure the assignment covers all classes and goods/services.
What about a license-back? Sometimes sellers want to keep using the name for a transition period. If so, you need a license agreement separate from the assignment. Otherwise you're infringing on your own former mark
Check your original trademark filing. If it was filed in your personal name but the business is an LLC, you might have a chain of title issue. Fix that before you sell.
Also consider any licenses you've granted to others. If you have a distributor or co-packer using the mark, those agreements need to be addressed in the APA. Buyer may not want to be bound by them.
Good point on chain of title. I've seen deals delayed for weeks because the trademark was registered to a defunct entity. Get a proper assignment from that entity to the current owner first.
One more thing — make sure the purchase agreement includes a reps and warranties section about the trademarks. You want the buyer to confirm they're not aware of any infringement claims, and you want to disclose any oppositions or cancellations. Keeps everyone honst.
The chain of title issue is real. My trademark is in my personal name but the business is an S-corp. I'll need to assign it to the corp first, then to the buyer. That adds a step. Also, the license-back idea is interesting — I hadn't considered that I might want to use the name for a short period agter closing.
If you do a license-back, spell out quality control and termination. Otherwise it's a naked license and you risk losing the mark.