When purchasing a small business, many buyers overlook one important aspect of the deal: transferring intellectual property rights. Typically, IP rights include copyrights, trademarks, patents, and other non-disclosure rights. I’ve highlighted three basic questions you should always ask before you purchase a small business.

Can you and do you want to transfer the business’ trademarks?

In some situations even if the trademarks are transferable, you may not want to transfer them. For example, the business’ logo may infringe on rights of another business. You obviously wouldn’t want to transfer ownership and risk being held liable for trademark infringement once you own the logo.

In other instances, the trademarks may not be transferable if the seller does not have the right to transfer…

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Suppose you came up with a distinct combination of ingredients that when put together in a dish create a unique flavor. Your customers have come to know your food based simply on this flavor. You’ve decided that you want to protect the use of this flavor so your competitors don’t confuse your customers with “knock-off” dishes. But can you actually trademark a flavor to protect it?

A recent case highlighted this interesting trademark question:

New York Pizzeria Inc v. Syal involved a pizzeria that brought a lawsuit against its former employee for allegedly breaching his employment agreement and wrongfully acquiring internal documents and recipes. New York Pizzeria alleged that the employee, Mr. Hembree, used these internal documents and recipes to create a…

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A few recent high profile trademark disputes making the news have brought to light again the importance of protecting your business’ trademarks and other IP. Specifically, these stories highlight the need to register your trademarks and draft carefully negotiated terms in any licensing agreements your business enters into.

Tully’s May Lose Right to Use of “Tully’s”

The Seattle Times reported that Keurig Green Mountain has sued Global Baristas, the Seattle investor group that bought Tully’s and saved it from bankruptcy, to prevent Tully’s from using the trademark “Tully’s” in its name. Keurig is arguing that Global Baristas has violated its licensing agreements by selling coffee from another local firm (Dillanos) without Keurig’s permission. Keurig claims that Tully’s owes Keurig $469,000.

In a statement last month,…

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I’ll set the stage: Two friends decide to start a business. They’ve been friends for years. They see eye to eye on just about every issue, including how the business should be formed and managed. They are ready to start selling, making money, and growing their idea into a sustainable business. They’ve decided that each partner has an equal stake in the business and will receive equal compensation. They want it to be simple, no lawyers, no accountants, no additional partners, etc. To seal the deal they cheers their beers to the future. You get the picture.

Get it in Writing Because The Future is Unpredictable 
Both partners trust each other, and neither has any reason to believe that their relationship will…

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