One of the most important things to
make sure of in any legal agreement involving the purchase of assets is that the transferor actually owns the assets you are seeking to buy.
make sure of in any legal agreement involving the purchase of assets is that the transferor actually owns the assets you are seeking to buy.
Recently, electronics giant Apple found itself facing embarrassment after it launched a claim in China regarding alleged breach of trademark rights. Apple sued Proview Electronics over breach of its iPad trademark. Apple had purchased the worldwide trademark rights to iPad, which had been registered as a trademark in China by Proview Technology, a subsidiary of Proview Electronics. The deal was done with Proview Electronics, which held the trademark rights in the rest of the world.
Proview Technology was not a party to the agreement with Apple. Accordingly, the trademark as regards China was not transferred to Apple by the agreement with Proview Electronics as that company did not own it at the time of the transfer.
Proview Technology has now commenced legal action against vendors of iPads in China on the basis that it has the legal trademark right over iPad in China and it seems Apple is likely to find it necessary to negotiate a new deal
with Proview Technology as regards trademark rights in China.
The moral of the story – if you are buying any asset, make sure it is owned by the vendor.