Entrepreneurs, Infringement, Litigation, Trademarks

Trademarks, Goodwill and M&A

A trademark includes any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from goods manufactured or sold by others, and to indicate the source of the goods. In short, a trademark is a brand name.

In Basile Baumann Prost Cole & Assocs., Inc. v. BBP & Assocs. LLC, the court examined the elasticity of the goodwill concept, which can extend to include brand, firm, and even that associated with individual members.

“Goodwill is “the total of all the imponderable qualities that attract customers to [a] business.” “There may be business or professional goodwill, or both combined in one enterprise.” Professional, or personal goodwill, “is good will that is based on the personal attributes of the individual such as personal skill, training, or reputation.” In Maryland, the concept of personal goodwill most often arises in cases involving the distribution of property in divorce, or covenants not to compete.”

“If … consumer satisfaction and preference is labeled ‘good will,’ then a trademark is the symbol by which the world can identify that good will.” “A sale of a business and of its good will carries with it the sale of the trademark used in connection with the business, although not expressly mentioned in the instrument of sale.”

Since goodwill is elastic – and divisible – attorneys in mergers, acquisitions and divestitures would do well to consult with a trademark lawyer to identify issues related to trademark (goodwill) ownership and transfer.

Published by David

I am a the founder of a boutique intellectual property law firm based in Chicago, Illinois. In my role as a trusted advisor, I act as the primary transactional attorney for my clients, reporting directly to a company’s executive staff and/or its General Counsel. I provide advice to business units and executives on copyright, trademark, ecommerce, software/IT, media & entertainment and issues associated with creating and commercializing innovations and creative content, drafting and negotiating contracts and licenses, advising on securities laws and corporate governance and managing outside counsel. My clients frequently rely on me to successfully draft and negotiate complex commercial and intellectual property transactions such as supply/distribution agreements, IP development and license agreements and documentation related to mergers, acquisitions and divestitures.