Patents and utility models as well as all other industrial property rights registered in favor of a company belong to its assets as intellectual property rights. If one acquires an interest in a company, one holds a share in the entire company to which the industrial property rights belong. If a company is acquired in its entirety, the intellectual property rights belonging to the company, i.e. patents, utility models, trademarks and designs, are also acquired.

In such a case, it is not necessary to take additional security measures, because the patents are already registered in favor of the company to be acquired. They also do not have to be explicitly acquired, because they are part of the company’s assets anyway.

Caution with asset deals

The situation is different in the case of an asset deal, i.e. the purchase of certain assets of a company. In this case, it is essential to ensure that the relevant industrial property rights are also taken over. It would be very unfortunate if one were to acquire the production machinery for a certain object, but not the patents or other industrial property rights necessary for the sale of the object. One would then, in fact, be able to produce, but would not be allowed to sell the manufactured items. In such a case, it is important to carefully review the patents of the company and to take over these to the extent necessary for the acquired business operations, or at least to secure a right to use them.

Should the remaining company in the asset deal also be interested in using the patents, a corresponding license agreement would have to be concluded between the parties. For every company acquisition, be it a “share deal” or an “asset deal”, it is advisable to involve a patent attorney at an early stage as part of the due diligence process in order to analyze the patent and trademark situation.

Do you have any questions for patent expert Dr. Bertram Rapp, or would you like more in-depth advice?