Intellectual Property in Asset/Stock Purchase Agreements

Brock, Jack

If you are purchasing a business, one of the most important assets you buy may be the intellectual property. In a business sale, the intellectual property includes, but is not limited to: patents, trademarks, copyrights, trade names, customer lists, and trade secrets. Many times, a buyer will seek market entry by purchasing a business and obtaining the goodwill this business has built over the years. Along with adding provisions in the Asset/Stock Purchase Agreement concerning the retention of key employees, it is important to include provisions concerning the intellectual property.

First, during your due diligence, you will want to discovery the types of intellectual property of the business. Second, your Agreement (whether it is a stock or asset sale) should include provisions about the transfer of the intellectual property. Third, you will want the seller to disclosure all of its intellectual property on the Seller Disclosure Schedules which should be attached to the Agreement, and incorporated by reference.

Intellectual Property is usually an important asset in a business purchase. If you are buying a business, remember to include provisions concerning Intellectual Property in your agreement and in your negotiations.

Disclaimer: The above does not constitute legal advice. If you are purchasing a business, you need to contact an attorney.

For help with intellectual property law questions or other civil litigation issues, call Jack Brock, II, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

 

Intellectual Property: Learn How to Protect Your Ideas

Brock, Jack

If you have a great idea, there may be people that wish to copy your idea. Although it is said, “Imitation is the sincerest form of flattery,” many times imitation will not compensate you for your idea unless you have adequate legal protection.

If you are 50 years or older and want to learn more about ways to protect your intellectual property, including a brief overview of copyright, patent and trademark law, East Carolina University offers a class through the Lifelong Learning Program.  To learn more, visit the ECU Lifelong Learning Program.

For questions about Intellectual Property or other civil litigation matters, please contact Jack Brock at 252-321-2020.

Nationwide Priority

Brock, Jack

For help with intellectual property questions or other civil litigation issues, call Jack Brock, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

If you have a company that has a brand, you may want to register your brand name as a trademark.  Registering your trademark has certain benefits, one of which is nationwide priority.  Nationwide priority means that the owner of a registered trademark has priority over other unregistered marks that began use after the filing date.  It also means that an owner of the registered mark has priority over other registered marks that were filed subsequent to the owner’s filing date.

Priority is important as the owner of the registered trademark which has priority over a junior trademark which infringes will be able to request that the court enjoin the junior infringing mark, and/or ask for damages.  For example, in one Fourth Circuit case, Lone Star Steakhouse & Saloon, Inc. v. Alpha of Va., Inc., 43 F. 3d 922 (1995), a national chain entered into the D.C. market area and forced another company to stop using its name, as the other company’s junior mark infringed on the national chain’s registered mark. Needless to say, the national chain’s registered mark had priority.

National priority means that an owner of a mark with priority can enjoin another company’s mark if the owner with priority can show a likelihood of entry into the disputed territory.  As the court stated in Lone Star Steakhouse, the registrant has a nationwide right, but the injunctive remedy does not ripen until the registrant shows a likelihood of entry into the disputed territory. . . . [The junior user’s] use of the mark can continue only so long as the federal registrant remains outside the market area.”

Injunctive relief, and/or damages will only be available if the owner can show that the junior mark infringes on the owner’s mark.  The “likelihood of confusion” test is used to determine whether there is infringement, and this test will be discussed in greater detail in subsequent articles.  What is important to take away from this article is that 1) if a company is interested in expanding into more market areas, or the company is concerned about other companies expanding into other market areas, and 2) the company has a recognizable brand name that they wish to protect, then the company should probably register their brand name. Registration will be strategically offensive (by allowing companies to expand with their brand into new market areas), and tactically defensive (by allowing companies to protect the use of their brand in their current market areas).

Introduction to Intellectual Property Issues

Brock, Jack

For help with intellectual property questions or other civil litigation issues, call Jack Brock, Attorney with Colombo Kitchin Attorneys in Greenville, NC, at 252-321-2020.

Today, our society is firmly in the information age.  More and more people are joining the world communication network with China being the country with the most internet users. People can instantaneously communicate from North Carolina to China in real time via video conference.  In short, the world is shrinking, and with the anticipated passage of the TPP, our economies are becoming more globalized than ever before.  What this means is now, more than ever, you MUST protect your intellectual property.

In order to protect your intellectual property, it is important to think about the different legal avenues that are available at the Federal level: 1) copyrights; 2) patents; and 3) trademarks.

A Copyright is a form of protection provided by the laws of the United States (Title 17, U.S. Code) to the authors of “original works of authorship,” including literary, dramatic, musical, artistic, and certain other intellectual works. This protection is available to both published and unpublished works. See http://www.copyright.gov/circs/circ01.pdf. If you have written a book or created original art, then you may want to think about copyright protection. You can even obtain copyright protection on source code for a computer program or lyrics to a song that you recorded.

A Patent is a property right which allows the holder to exclude others from making, using, or selling an invention. A Patent may be granted on “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 USC Section 101. Patents can be granted on machines, medicines, certain plants, certain living organisms, and processes. Patent law is extremely complicated; if you have created a new invention you should immediately speak to a Patent attorney because certain acts (such as public disclosure and public use) may bar you from obtaining your patent.

A Trademark is a word, name, symbol, device, or any combination thereof used to indicate the source of goods or services. http://www.uspto.gov/trademarks-getting-started/trademark-basics. A Trademark is a way for you to identify your business and build a recognizable brand. If you own a business, or are thinking about starting a business, you may want to speak to a Trademark Attorney. Although it is not necessary to register your Trademark with the Federal government, registering your Trademark does provide certain benefits.

This blog entry is meant to be an introduction to the three forms of intellectual property that the government provides. Of course, there are other avenues that are used to protect intellectual property, such as non-disclosure agreements and trade secret law. Usually determining whether you would like to register with the government, or use a different method to protect your intellectual property (such as trade secret law) is a business decision.

In subsequent blog entries, I will discuss more specific issues relating to intellectual property.