Name changes before sell off and Interdependence of IPR’s

If part of a group is to be sold and there are no plans for the seller's name to be shared with the buyer in the future, it is prudent for the seller to consider how to transfer back to it any rights in such name, which may consist of or include a name which will continue to be used by the retained part of the group/ seller, prior to any potential sale. It is also prudent to conduct an IP audit of the IP and goodwill relating to the business to be sold to determine which shall be retained by the group and which shall be sold.

It is important to conduct an audit to:

• check the extent to which IP is already shared between companies or business units within a group before any sale.
• determine which IP will be retained and which will be sold.

If rights are shared before the sale, consideration must be given to how those rights will be divided, for example should particular rights be carved out by way of assignments and/or licences? Where it is necessary for rights to be shared after the sale, for example because the seller is selling only part of its business and the buyer will need to use some of the IP itself, the seller will need to identify the IP which needs to be shared and make appropriate arrangements going forward. By way of example, IP owned by the seller that needs to be shared after the sale could either be retained by the seller and licensed to the buyer or the seller could transfer the IP outright to the buyer who would then grant a licence back to the seller. 

When considering how to formalise the terms on which the legal rights will be used after the sale, the following points should be noted: 

• House marks. It is not unusual for a buyer to want the right to use some/ all trade marks previously used by the seller in connection with the business particularly during a transition period post sale. The seller can licence the trade marks for a defined period. 
• Trade marks. The company being sold may use different trading names and trade marks as the seller's retained group. If the goods are unrelated, itmay be possible for the seller to assign the marks to the buyer.
• Patents and know-how. Often, patents and know-how will be exploited in different but related business activities, and these can be shared by licensing arrangements agreed between the seller and the buyer.
• Predominance. Once it has been established that there is "shared" IP, the issue of who should own and who should use IP under licence, will usually be agreed during the negotiation of the sale of the business. 

In the case of IP licensed from a third party, the licences will need to be reviewed to ascertain what provision, if any, they make for assigning or novating (transferring) the licence to the buyer. It is likely that the licensor's consent will be required. Alternatively the buyer may need to negotiate a licence directly with the third party.