Protecting Your Brand from Business Risk

By: Urlich Mcnab Kilpatrick  05-Apr-2012

If your business gets into trouble and the worst should happen, what is the fate of the intellectual property?

Sometimes the most important assets in a business are not the stock in trade or tangible assets, but the intangibles. This includes things like trade names, domain names, logos and trademarks – all significant features of branding. These branding intangibles are part of what is known as intellectual property (IP), and it is often this IP that has the most value, both to your current business and as a future saleable commodity.

All business owners should assess their risk, and this would be true especially in tough economic times. If the worst happens, and your business is liquidated, all business assets would be sold to clear debt. If the IP belongs to the business, then the IP is also subject to liquidation and sale. Gone. Lost.

It is a good strategy to evaluate whether or not your branding IP should be owned by an entity separate from the business. The IP owner – a stand-alone company or family trust, for example – would grant a license to the business to use the IP, but ownership of the IP would be secure from the reach of the business creditors. This very practical risk management ring-fencing would ensure that the IP is not lost in the event of a business collapse.

Barbara Beck – February 2012

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