Madison Marcus | Buying or selling a business: Have you considered intellectual property?

Buying or selling a business: Have you considered intellectual property?

Author: Stephen Jenkins, Partner – Intellectual Property, Madison Marcus Law Firm

Whether you are buying or selling a business or a company, one of the most overlooked aspects is the intellectual property (IP) assets of the enterprise.

A brand, client database, confidential information and other intangible assets of an enterprise may be the defining reason you purchase a business. However all too often, we at Madison Marcus see little or scant attention paid to the proper identification, valuation and securing of these most valuable assets.

Often, it is these assets that provide the real competitive edge which you are paying for. Madison Marcus outline some of the key issues to consider when buying or selling a business.

Identification of IP:
Registered IP, whether as a Trade Mark or Patent is readily identifiable. However, copyright, confidential information and unregistered brands need to be identified and made part of the sale process. Reviewing the work undertaken by employees and contractors on behalf of the business is fundamental to the correct identification of the IP in a business.

Protection of IP:
Proper registration of brands, or applications for patents, provide maximum protection for the competitive advantage that a business holds. In addition, a review of all employment contracts and third-party contractor agreements is critical to make sure the business owns, and is able to properly prosecute, any improper use of its IP.

Valuation of IP:
Although the modelling for valuation of IP is different to more tangible assets such as plant, equipment or real estate, to make sure you obtain fair market price both as a vendor or purchaser, a valuation should be obtained for the intellectual property assets.

Careful consideration of these fundamental issues surrounding intellectual property, for both a vendor and purchaser, can help avoid many of the traps which befall buyers and sellers of businesses and help avoid costly and unnecessary litigation when things go wrong.

If you wish to understand better these issues and help maximise your negotiating position then do not hesitate to contact Stephen Jenkins, Head of Intellectual Property at Madison Marcus Law Firm on +61 437 008 253 or by email,


Madison Marcus Law Firm produced this article. It is intended to provide general information in summary form on legal topics, current at the time of first publication. The contents do not constitute legal advice and should not be relied upon as such. Formal legal advice should be sought in particular matters.

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