1. What IP Assets Will the Buyer Actually Receive?
The seller's asset schedule may omit technology the business depends on. Compare the purchase agreement with its products, brands, and creative work before deciding what has value.
Inventory Registered and Unregistered Rights
Patents, trademarks, copyrights, trade secrets, software, and domains require different checks.
- Match applications and registrations to asset schedules.
- Identify source code, know-how, and overlooked materials.
Separate Ownership from Licensed Access
Third-party software or content may be essential but unavailable for transfer.
- List excluded assets and existing licenses.
- Confirm what the buyer may use after closing.
2. Can the Seller Prove Ownership and Transfer Title?
A registry entry alone cannot establish every ownership interest. Buyers must trace the chain of title and determine whether co-owners, liens, or missing assignments restrict the transaction.
Trace Assignments and Encumbrances
Compare USPTO and Copyright Office records against executed agreements.
- Check transfers from inventors and prior owners.
- Review joint interests, security rights, and releases.
Apply Each Federal Transfer Rule
35 U.S.C. § 261 requires written patent assignments; 17 U.S.C. § 204(a) generally requires signed copyright transfers.
- Check signatures and the rights being conveyed.
- Review patent assignments before closing.
3. Which Licenses Could Restrict Use after Closing?
Acquiring IP does not necessarily remove existing licenses. Assignment restrictions, territory limits, and third-party permissions can change what the buyer may do with the acquired rights.
Check Consent and Transfer Restrictions
An asset sale and an equity purchase may affect license agreements differently.
- Review assignment and change-of-control provisions.
- Identify consent, exclusivity, and sublicensing limits.
Review Continuing Contract Obligations
Royalties, confidentiality terms, and retained rights may outlast closing.
- Identify payment and permitted-use obligations.
- Review related technology licensing terms.
4. Could Past IP Disputes Affect the Acquisition?
Pending claims can affect valuation and contract negotiations. Historical liabilities do not necessarily transfer in an asset sale, but successor-liability exceptions and other laws may apply.
Investigate Infringement and Validity Risks
Ask about threatened claims, lawsuits, and administrative challenges.
- Review demand letters and pending proceedings.
- Assess office actions and cancellation risks.
Negotiate Responsibility for Existing Claims
Warranties and indemnities allocate contractual risk but cannot exclude every statutory liability.
- Specify covered losses and defense expenses.
- Set exclusions, claim procedures, and agreed limits.
5. Did Employees and Contractors Transfer Their Rights?
Paying a creator does not always establish ownership. Federal copyright work-made-for-hire rules differ from patent ownership, while applicable state law may limit invention assignments.
Examine Creator and Contractor Agreements
Check whether the company received enforceable rights in key contributions.
- Collect signed invention and copyright assignments.
- Identify retained rights and pre-existing technology.
Test Employee Invention Exclusions
State laws may exclude qualifying independently developed inventions from employer assignments.
- Review applicable agreements and statutory exceptions.
- Resolve unclear ownership before closing.
6. How Could Taxes Change the Purchase Economics?
Tax treatment depends on asset classification and transaction structure. Analyze federal amortization separately from any state tax obligations rather than applying one rule to the entire portfolio.
Classify Acquired Intangibles
IRC § 197 generally allows 15-year amortization for qualifying intangibles, with exceptions for certain separately acquired patents and copyrights.
- Document classifications and purchase-price allocations.
- Coordinate corporate due diligence with tax review.
Review Allocation and State Tax Exposure
IRC § 1060 may apply to qualifying business asset acquisitions; state transfer taxes vary.
- Review allocation and reporting requirements.
- Check relevant state taxes for the actual assets.
7. What If the Seller Cannot Complete the Transfer?
Missing consents or signatures can delay closing. The agreement should connect unresolved ownership issues to practical conditions, payment terms, and follow-up obligations.
Set Closing Conditions and Remedies
Escrow, holdbacks, and indemnities may address identified gaps.
- Require specified assignments, releases, and consents.
- Define survival periods and dispute procedures.
Assign Post-Closing Responsibilities
Some filings and confirmations may remain outstanding after payment.
- Identify documents, deadlines, and responsible parties.
- Coordinate technology and IP transactions work.
8. Frequently Asked Questions
Can IP be purchased without buying the company?
Yes. An asset purchase may transfer specified rights without acquiring the seller's equity, subject to transfer restrictions and applicable law.
Must a trademark assignment include goodwill?
Generally, yes. Under 15 U.S.C. § 1060, the mark must transfer with associated goodwill; certain intent-to-use applications face additional restrictions.
Can a buyer acquire IP that has a lien?
Potentially. Buyers should investigate the security interest and determine whether a release or another arrangement is needed.
Does buying a patent provide freedom to operate?
No. Patent ownership does not establish that a product avoids other parties' patent rights. Separate infringement analysis may be necessary.
9. Discuss Your IP Acquisition with SJKP
An overlooked license or incomplete assignment can affect the transaction long after closing. SJKP's attorneys can evaluate ownership documents, transfer restrictions, and contractual options. Contact SJKP to discuss the issues that warrant review before signing or closing.
08 Oct, 2026
