On October 2, 2020, Andrew Price was quoted in Managing Intellectual Property on the trademark issues businesses should consider during acquisitions, such as paying attention during due diligence to better understand how an acquired company's trademark rights could affect the terms of a deal, and looking at what must be done to integrate a target’s trademark strategy into its own.
There are several important reasons why companies should address trademark issues during due diligence, rather than after the acquisition has finished. Price says a company may find that a mark’s coverage is so bad that it devalues the target’s portfolio in some way.
Companies should also make sure trademark records are up to date. Price says companies should record trademark assignments as soon as possible in any key countries. But, he adds, the company might want to consider the size and cost of that task. Updating 10 or 20 records might not be very expensive, he says, but changing thousands of records could be quite costly.
Buyers should make sure that during due diligence they have a clear understanding of which of the target company’s trademark rights they care about, he says. They should also conduct a thorough audit once the acquisition ends to evaluate the cost and benefits of recording assignments and maintaining registrations.