Question:

I own a boutique mineral water bottle business. However, I’m now looking to sell my company’s trademarked name. Is there anything business owners need to do besides sell their domain name if they wish to transfer naming rights? Also, how might I go about doing this? —Jon Salkin, Rhinebeck, N.Y.

Answer:

If you’re selling your company’s name, selling its domain name is probably one of several considerations, especially if it elicits "good will" — warm, fuzzy feelings customers attach to brands or company names, says Barry Werbin, chairman of the intellectual property practice group at New York law firm Herrick, Feinstein, who routinely counsels clients on trademark and business-name issues. "It is imperative that if any trademark is sold, it is sold along with the ‘good will’ of the business reflected by such mark," he says. In the U.S., a sale of a trademark without that "good will" will actually render the mark void if it’s ever challenged in court. To avoid this scenario, sellers must relinquish all rights to the name, including web addresses, legal company names, signs, product names, trademarks and logos. In addition, the seller is barred from starting up another company with a similar name, says Werbin.

Before you sell, make sure your company’s trademark is active, Werbin says. Under U.S. trademark law, ownership rights don’t exist until a name is used as a trademark in connection with the sale of goods or services in the U.S. "Mere use as a passive domain name is not [considered] trademark use," he says. (Click here for more on trademark rules and procedures.)

Names can be transferred simply by composing a bill of sale, assigning it and then recording the transaction with the U.S. Patent and Trademark Office and with any applicable state. However, if you intend to keep such company assets as accounts, inventory, customer lists or trade secrets, then there’s no substitute for good legal counsel with experience in corporate and trademark matters, Werbin says.