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How to Avoid Issues when Buying or Selling Intellectual Property

Updated: May 8

Do you have an amazing business idea that is earning you a ton of revenue, and your toying with the idea of selling?

Or maybe there is an offer on the table for you to purchase a company, and most of its assets are trademarked or copyrighted.

Did you know that typically more goes into these types of transactions than simply purchasing real property and tangible assets.

In today’s world, it’s common for a company's value to be tied to intellectual property, rather than the physical items they own, such as their inventory or property. For example, the value of Facebook’s software most likely far exceeds the value of the buildings they own.

In some cases, you may need to obtain what’s called an “assignment” to ensure the rights and ownership of IP belong to the proper party. An assignment is a type of contract used to transfer ownership of specific intellectual property from one party to another. When done properly, the transfer is permanent and the seller won’t have any more rights in the IP any longer.

I won’t get into the specific items that should be in a proper assignment for it to be effective, but one thing that you’ll want to ensure is that the intellectual property being assigned is correctly registered.

One last thing about buying and selling intellectual property: be sure that it complies with all applicable US Laws, and, if it’s being transferred internationally, you’ll also want to comply with any applicable Export Administration Regulations and the International Traffic in Arms Regulations.

An assignment is often a vital part of a business transaction so I hope that this information helps you.

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