A Global and Local Outlook
Edited by Irene Calboli and Jacques de Werra
Chapter 5: HOW TO MAKE TWO OUT OF ONE: THE INS AND OUTS OF TRADEMARK PORTFOLIO SPLITTING TRANSACTIONS
Trademarks are key assets for many businesses. Most companies own trademarks and use protected trade names, logos, and designations to distinguish their products and services in the marketplace. As such, trademarks can be a significant driver for mergers and acquisitions, and the trademark portfolios of the companies involved often play an important role in these transactions. One of the key issues in these transactions is how to separate the trademark portfolio affected by the transaction. This can be especially tricky if trademarks will have to be used not only by one of the parties following the completion of the transaction, but by both of them. For instance, take a large public company that wants to divest its consumer electronic division. The consumer brand is very popular and a key asset in the deal. The buyer made it a condition that it can use this brand following the acquisition. The seller, however, has used the same brand in other divisions that will not be divested. Although the seller is willing to eventually transition to a new brand, it needs a certain time to do so. Hence, the seller and the buyer will have to use the same brand for some time following the transaction. In such a situation, the parties need to agree on a way of coexisting, both of them with the same trademarks, following their transaction. This is usually done by means of a trademark portfolio splitting or trademark co-existence agreement.
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