Selling it First, Stealing it Later: The Trouble with Trademarks in Corporate Transactions in Bakruptcy

Xuan-Thao Nguyen


Imagine this hypothetical. Ten years ago, Apple, Inc. (Al), wishing to concentrate on its software business, decided to sell off its struggling Apple Music Division. The sale of the corporate division included physical and intangible assets, facility and personnel. Al found a willing purchaser (NewCo) for the division at a negotiated price. Al and NewCo entered into an asset sale and purchase agreement, together with a perpetual, exclusive, royalty-free trademark license agreement. The parties bargained for and agreed that Al would continue to use the trademark “Apple” in business outside the division, and NewCo has the right to use the trademark “Apple” in connection with the music products and services offered by the division. NewCo began the operation of the division after the acquisition. Things had been going very well for NewCo; it had expanded into the digital music world with many new “Apple” products and services. . . .

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