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Read MoreIntellectual property (IP) refers to intangible assets such as patents, trademarks, copyrights, and trade secrets. These assets increasingly represent significant, material value of businesses, and as such, they need to be properly protected and managed in buy/sell agreements.
In a buy/sell agreement, the seller is often required to transfer ownership of any IP that is part of the business being sold. This may include patents, trademarks, and copyrights that are used in the business, as well as any trade secrets that are part of the business’s operations. That transfer of ownership poses certain risks to both buyer and seller.
The buyer will typically want to ensure that they are acquiring all the IP associated with the business, and that there are no outstanding issues or disputes regarding the ownership or use of the IP. The buyer may also want to ensure that the IP is properly registered and protected, and that there are no third-party claims to the IP.
The seller, on the other hand, will want to ensure that they are being properly compensated for the transfer of ownership of the IP, and that they are not relinquishing any rights or claims to the IP that they may have.
To address these issues, the buy/sell agreement should include provisions that specify the IP being transferred, the terms of the transfer, and any necessary warranties or indemnities. It should also address any ongoing obligations or restrictions on the use of the IP after the sale.
There are several steps involved in transferring ownership of IP assets:
It is important to work with an attorney who is knowledgeable about intellectual property law when transferring ownership of IP assets to ensure that the process is done correctly and that all necessary documents are prepared and filed.
We would like to thank our colleagues Scott Evans and Christopher Bruce for providing insight and expertise that greatly assisted this research.
Scott E. Evans, CPA, CFF, ABV, is a Managing Director in J.S. Held’s Corporate Finance business unit. He brings extensive experience in the calculation of economic damages, forensic accounting / embezzlement, family law matters, business valuations, bankruptcy and solvency analyses, fraudulent financial reporting, and accounting malpractice investigations related to SEC registrants and auditors, analysis of purchase price disputes arising from the sale of a business, investigations performed for the Arizona State Board of Accountancy, and audits performed under generally accepted auditing standards. He has provided expert testimony related to damages and other financial issues in federal, state, and arbitration matters, in both civil and criminal cases.
Scott can be reached at [email protected] or +1 602 396 7434.
Christopher Bruce is a Director in Advisory Services, working from the Chicago Headquarters of Ocean Tomo, a part of J.S. Held. Advisory Services is comprised of Transaction Advisory, Investments and non-securities Investment Banking. Mr. Bruce holds the FINRA Series 7 and 63 license. Mr. Bruce plays an integral role in supporting the firms work on behalf of client in the areas of IP-driven transactions, mergers and acquisitions, IP monetization strategy as well as IP-based special situations investments.
Christopher can be reached at [email protected] or +1 312 327 8022.
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