Business Intellectual Property

Purchase of a Business

When you purchase a business an important consideration is the ownership of Intellectual Property of the purchased business.  Make sure you complete an appropriate search for patents, trademarks and copyrights.  In addition, review the secretary of state for information on registrations of names under which the purchased business does business.  This may have an impact on the purchase price of the business.

Basic Searches

Intellectual Property can be registered at state and federal levels.  The federal compilation is quite easy to access and search online at  Information is also available at the Arizona Corporation Commission and Secretary of State of Arizona as well as other states Secretaries of State.  It is important prior to starting a business to determine if some other business is using the name you select.  You must evaluate the scope of use of the trademark you want to use and assess the risk that some other person may have already been using the name.  Make sure you do the search prior to forming the company or labeling the product.

Employees and Contractors

Only a written agreement will protect the ownership of the Employer or a company using a consultant to generate Intellectual Property.  As an example, if you pay a consultant to write software for your company and do not have a written agreement, the consultant will own the copyright to the software and be able to sell it to anyone.  You must have a written agreement to specify which of the parties owns the Intellectual Property.  You can declare the consultant is hired with a clause stating the software is a “work for hire” and that your company owns the Intellectual Property rights.  You must have an agreement with employees, sales representatives and hired engineers to establish the actual ownership of the copyright to the software.

Arizona Corporation Commission and Tradenames

Just because the Arizona Corporation Commission clears a name, it does not mean that you have not violated some other persons previously registered tradename.  The standard the Arizona Corporation Commission uses is not the same as the analysis done federally for a tradename.  The standard is the likelihood of confusion in the mind of a consumer.  This is not a very precise definition or standard to use, causing litigation to be a real risk.  In addition to Arizona Corporation Commission clearance you should also review all tradenames with the Patent and Trademark Office to determine risks involving ownership of intellectual property.