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How to sell intangible assets online: patents, trademarks and software.

Published in: Intellectual Property
by Arlo Canella
Home > How to sell intangible assets online: patents, trademarks and software.

When it comes to intangible assets – such as patents, trademarks, and software – many people focus on their creation and development, but often neglect to consider the eventual assets disposal or monetization phase. In this article, we will address the key steps that should be followed by those trying to successfully “sell” intangible assets.

What are the situations in which an intangible asset is "sold"?

An intangible asset may actually be disposed of for several reasons. As mentioned earlier, one of the main reasons for disposing of an intangible asset is to monetize it.

This may occur, for instance, when the entrepreneur or startup that has developed a successful web platform or product and an investor is willing to buy it to directly benefit from it.

Conversely, if things have not worked out as planned, selling an intangible asset may be a way to recover development expenses (at least to some extent).

In other situations, an entrepreneur may simply choose to dispose of the asset because he or she is changing strategy and wants to focus on other activities.

In any case, monetization of an intangible asset always requires careful planning and consideration of the legal and financial implications of the transaction. Each intangible asset, however, has its own peculiarities. Let’s examine what they are.

Which intangible assets are easiest to substantiate a "sale" for?

The market for intangible assets, such as patents, trademarks and six software, is indeed growing but has very specific rules. Owners of such assets always try to make the most out of the sale, but since the negotiation of these deals is mostly done privately, the number of potentially interested parties is restricted to the circle of direct acquaintances. Clearly, the situation is more favorable if the asset is properly presented online.

The ease with which a sale of an intangible asset can materialize depends on several factors, such as market demand, the intellectual property of the asset, and its economic valuation. To “sell” an intangible asset requires peculiar skills. This is why you refer to specialized professionals who are responsible for:

  • making a legal and technical verification of the actual ownership of the asset;
  • describing the asset appropriately;
  • estimating its economic value (a certified appraisal is required for some activities);
  • promoting the asset in appropriate venues to make it attractive;
  • assisting the parties in negotiations;
  • drafting the transfer contract and transcribe the deed at the appropriate offices.

In general, the easiest intangible assets to sell are those that have strong market demand because they are known in the industry. As an example, a well-known trademark or successful software is easier to sell than an unfamiliar patent or product. However, an accurate description of the asset and an expert opinion can make a difference by helping potential stakeholders identify the asset and make a proposal.

The importance of the "presentation" of the intangible asset

The ease with which an intangible asset can be sold also depends on the clarity with which the asset is proposed and described. In this regard, legal and economic expertise can play a major role.

As an example, when a company goes through bankruptcy its intangible assets are sold at auction or on specialized online portals after being appraised. There is no reason not to adopt the same online advertising approach for healthy companies that simply want to monetize an intangible asset such as a patent or software.

Just think of the real estate industry, there are more opportunities to sell a house or industrial shed if the asset is presented accurately and relevant information is made available to describe it. As a general rule, for an intangible asset, the same rules apply.

What is the difference between a registered and an unregistered asset?

Let’s be clear, intangible assets as the word itself says are “intangible.” The description of the asset becomes crucial because it provides greater clarity and understanding of the asset in question and greater certainty as to its ownership.

Registered intangible assets, such as patents, trademarks or designs, are easier to sell because they give a legal guarantee thanks to the certificate of deposit and/or registration.

However, assets of a different nature, such as industrial processes or secret recipes, know-how, can also have great potential for monetization if presented to the market in an appropriate manner and appraised by experts.

Lastly, as far as software is concerned, the availability of the source code and legal proof of ownership of the software by the promising seller plays a key role. For this reason, the technical-legal evaluation is always decisive, and technicians who can guarantee the functionality of the asset being bought and sold are often used.

Briefly described intangibles whose intellectual property is doubtful will obviously have less chance of entering the much-desired negotiation stage with the investor.

How to set the starting price?

When an interested investor or potential buyer is already in place, we get right into the thick of the negotiations. Statistically, these are the cases in which IP due diligence and appraisal become most common.

Due diligence is a process of analyzing and evaluating the risks and opportunities associated with a business transaction, while IP due diligence focuses specifically on the intellectual property of the company being transacted.Both processes are critical to ensuring a well-considered transaction and avoiding possible legal liability.

The economic valuation of the intangible asset, moreover, is an important factor that can influence the ease with which the sale can materialize. If the starting price of the intangible asset is not consistent with its market value, it may be difficult to find interested buyers. Conversely, if the selling price is too low, the owner may not be able to get the right value.

Today, the market for information technology, software, and Web platforms is constantly expanding, and with it, the market for technologies related to it. However, not all donuts succeed with the hole. Have you ever thought about “recycling” a Web platform instead of building one from scratch? You would find that you could save quite a bit of money.

Well, the easiest intangible assets to sell are those with clear intellectual property, accurate economic expertise and strong market demand. The rest is up to the entrepreneurial spirit to seize the opportunities that the market offers.

How to create a "package" for online sales

Sometimes it is complex to establish a starting price for the intangible asset, partly because the seller is unable to describe and estimate the asset to be offered for sale.

However, professionals experienced in this kind of complex activity serve this purpose. It is true that sometimes an appraisal is not needed to sell an intangible asset. However, the appraisal makes it easier to understand the asset and facilitates negotiations in the interest of both parties involved.

Before beginning the sale process, it is important to conduct some preliminary appraisals. This can be by describing the asset accurately and valuing the patent, trademark or software according to current market practice. There are several companies that offer valuation services, but it is important to choose a properly accredited party with experience in the specific area of intellectual property.

By creating a so-called. “sales package” you enable the potential buyer to know all the salient information. The package may include detailed descriptions of the asset, legal documentation associated with the patents, know-how, information on software repositories, and other relevant information. Often assets may be offered in “bundles” because of their complementary nature. Indeed, the lack of some documents or information may render the asset unserviceable.

After creating the sales package, it is easier to present the asset to potential buyers, including online through specialized portals. In addition to searching for a buyer through public relations in the relevant industry or by researching individuals who might have an interest in the intangible asset, it is possible to use websites that allow intangible assets to be offered for sale online.

In summary, selling an intangible asset can be a complex process that requires specific knowledge.

To sum up, the following key steps should be kept in mind:

  • Situations when selling an intangible asset: monetization, recovery of development expenses, change of business strategy.
  • Factors influencing the sale of intangible assets: market demand, intellectual property, economic valuation.
  • Role of specialized professionals: legal and technical verification, appropriate description, value estimation, promotion, assistance in negotiations, and drafting of the transfer contract.
  • Importance of intangible asset presentation: accurate description, legal and economic expertise.
  • Differences between registered and unregistered intangible assets: legal guarantees, ease of sale, ownership of software.
  • Setting the starting price: economic valuation of the asset, consistency with market value, importance of due diligence and appraisal.
  • Creating a “package” for online sale: detailed description of the asset, legal documentation, information on software repositories, presentation to potential buyers through specialized portals.

The Canella Camaiora Law Firm specializes in the due diligence of intangible assets: the firm’s attorneys collaborate with appraisers and accountants on valuations and the tax side of transactions. In addition, the Firm collaborates with web portals specialized in the sale of intangible assets such as patents, trademarks, designs, platforms, and software, including those from bankruptcy and insolvency proceedings.

In particular, the Firm’s expertise in the legal valuation of intangible assets makes it easier to upload them to platforms and maximize their visibility, with the goal of selling intangible assets in less time and with greater satisfaction.

© Canella Camaiora Sta. All rights reserved.
Publication date: 6 April 2023
Last update: 7 September 2023

Textual reproduction of the article is permitted, even for commercial purposes, within the limit of 15% of its entirety, provided that the source is clearly indicated. In the case of online reproduction, a link to the original article must be included. Unauthorised reproduction or paraphrasing without indication of source will be prosecuted.
Avv. Arlo Cannela

Avvocato Arlo Canella

Managing Partner of the Canella Camaiora Law Firm, member of the Milan Bar Association, passionate about Branding, Communication and Design.
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