Playboy Enterprises is up for sale, and the iconic ‘Playboy Bunny’ logo, reportedly created in the 1950s in less than 40 minutes, is the company’s most valuable asset. It can all be yours for a mere $US500 million.
Whether you’re buying a company (including its IP) or just buying trade marks, there are a few things you should look at before handing over your cash:
- Valuation. Beware a trade mark that is in decline, particularly when the valuation is based on historical sales and profit.
- Consider recent events. Have there been any recent events that may have affected the reputation and subsequent value of the trade mark? For example, has the trade mark been associated with tragic events or diversification that may have impacted the value of the brand in the mind of the consumer?
- What rights are you actually buying? A registered trade mark, a pending application that you may never be able to protect or a bundle of intangible rights? Is all or some of the trade mark registration at risk of being removed from the TM Register because it hasn’t been used? Investigate fully, and ask for proof of the rights.
- Investigate all contracts associated with the trade mark. Are there Licence Agreements in place, when do they expire and can they be transferred to a new trade mark owner? What other contracts exist?
- Carve outs. Know exactly what you’re getting for your money. Are there ‘carve outs’ allowing the seller to retain certain rights, such as the rights in certain countries or in respect of certain goods/services? Is the trade mark subject to restrictions, such as that the name can only be used with a particular logo or picture?
- Read the small print. The 29 room Playboy Mansion is also up for sale. If you’re the successful purchaser, don’t expect to move in straight away. It’s a condition of the sale that the new owner must allow Hef (and his ...err ... friends) to continue living there until his death. Also, while you might get the house (eventually), you don’t get the name – the trade mark “Playboy Mansion” will stay with Playboy Enterprises.
- Past events. Is the Seller indemnifying you for past events? You don’t want to be responsible for things the seller did or didn’t do when they owned the trade mark.